A Sunk Cost Is A

question 55

Multiple Choice

A sunk cost is a:

• A) fixed cost.
• B) potential benefit forgone.
• C) cost that cannot be changed and is therefore not relevant to decision making.
• D) cost which may be saved by not adopting an alternative.

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Definitions:

Business Cycle

The fluctuation in economic activity that an economy experiences over a period, characterized by periods of expansion and contraction.

Troughs

The low points in the economic cycle, characterized by reduced economic activity and lower levels of production and employment.

Unanticipated Inflation

A rate of inflation that is either higher or lower than expected.

Creditors and Debtors

Creditors are entities or individuals to whom money is owed, while debtors are those who owe money to another party.