When making choices, suppliers should not allow sunk costs to directly affect their current decisions because
a. sunk costs do not reflect foregone opportunities accompanying current choices.
b. sunk costs will not influence the accounting costs of a firm.
c. sunk costs influence the demand for products, not the supply.
d. past choices fail to provide any information relevant to current decision making.
A
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The unemployment rate is equal to
a. the number unemployed divided by the labor force. b. the number unemployed divided by the population. c. the number unemployed divided by the number employed. d. the labor force divided by the population.
What happens to the monetary base if the domestic currency is undervalued (the central bank fixed the exchange rate below equilibrium) and the central bank intervenes to fix the exchange rate at its current level?
a. The change in the monetary base is ambiguous. b. The monetary base is only affected by interventions of the central bank when the domestic currency is overvalued. c. The monetary base will rise. d. The monetary base is never affected by interventions of the central bank. e. The monetary base will fall.
Marginal utility is defined as
A. the number of units consumed divided by the total utility. B. the total utility divided by the total number of units consumed. C. the increase in utility divided by the total number of units consumed. D. the change in total utility divided by the change in number of units consumed.
Suppose consumers anticipate that their wealth will grow over time, because of interest earnings and capital gains. According to the life-cycle hypothesis, such optimism should cause current consumption to be ________
A) relatively low B) relatively insensitive to changes in income C) rising as individuals near retirement age D) relatively high