When would sunk costs be irrelevant for current decision making?
a. when the sunk costs are computed using accounting methods
b. when the sunk costs are greater than variable costs
c. when the sunk costs have been incurred only a short time ago
d. Sunk cost are always irrelevant when making current decisions.
D
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A perfectly competitive firm's supply curve
A) shows the relationship between the price and the quantity the firm will produce. B) is the portion of the marginal cost curve above the average variable cost curve. C) is upward sloping. D) All of the above are correct.
Which of the following would not be considered physical capital?
A. An axe B. Fertile soil C. A factory D. A forklift
Fannie Mae and Freddie Mac's dominance of the secondary mortgage market during 1995-2008 encouraged mortgage originators to
a. extend only 30-year, fixed-rate mortgages. b. require higher down payments in order to obtain a home mortgage. c. loosen lending standards as long as the mortgages were acceptable to Fannie Mae and Freddie Mac. d. scrutinize the credit-worthiness of borrowers more carefully.
In medieval Europe an important technological advance was the use of the padded horse collar for plowing. Once this idea was thought of, other people used it. This illustrates that knowledge is generally a
a. public good. b. societal good. c. private good. d. normal good.