A sunk cost is
A) the cost for drilling certain types of wells, such as a well for water.
B) a past cost that cannot be recovered.
C) a cost that is highly relevant for decision-making.
D) an opportunity cost.
B
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Refer to Excise Subsidy. The deadweight loss created by the subsidy is represented by
The following questions refer to the accompanying diagram which shows the effects of an excise subsidy given to firms. The initial price and quantity are P0 and Q0, respectively. After the subsidy is granted, the equilibrium quantity is Q1, firms receive the price Ps, and consumers pay the price Pd.
a. area F + G.
b. area D + G + J.
c. area C.
d. area D.
Which of the following would not be considered price discrimination?
a. setting separate rates for residential and commercial uses of electricity b. giving a senior citizen discount at restaurants c. renting recently released videos at a higher price than the old classic videos d. giving children a discount at the movies e. giving students a discount on ski lift tickets
Unregulated markets will tend to
a. rapidly deplete any natural resource. b. naturally conserve any depletable natural resource by pushing up its price every year by a constant dollar amount. c. naturally conserve a depletable resource by pushing up its price at a constant rate every year. d. deplete a resource unless new supplies are found.
The MPC in the U.S. economy has been estimated to be near 0.95 . If this is an accurate measure, then the numerical value for the multiplier would be
a. 0.9. b. 1.8. c. 9.5. d. 10.0. e. 20.0.