Molly Sharp is producing a documentary about the plight of the six-toed ferrets of Sri Lanka. Molly has spent $125,000 of her own money on this project and the documentary is now complete
Molly just found out that no studio is willing to release her documentary and she must now shop it to cable television networks, where she knows she will not be able to recoup her investment. Which of the following statements regarding Molly Sharp's documentary is true?
A) The $125,000 investment is an economic cost, and she will still make an accounting profit even if the television network willing to air her documentary pays her less than $125,000.
B) She should not try to have her documentary aired on television because she cannot recoup her $125,000 investment.
C) Since the $125,000 is a sunk cost, she should still try to have her documentary aired on television even though she will not see a profit.
D) The $125,000 is a variable cost, so will not be incurred if she chooses not to have her documentary aired.
C
You might also like to view...
The value of marginal product of the tenth worker hired by a firm is $50. What is the maximum wage that should be paid to the worker?
A) $5 B) $500 C) $50 D) $0.20
President Obama needs to get Congressional approval to enact measures to boost the economy. The time involved to formulate and get approval for these policies are called
A) crowding in. B) outside lags. C) automatic stabilization. D) inside lags.
Refer to Table 8-29. Based on the table above, what is national income for this economy?
A) $4,700 billion B) $4,000 billion C) $3,150 billion D) $2,450 billion
How will increased usage of the Internet by employers and employees influence the job search process?
a. It will make job-related information more costly and, therefore, tend to increase the rate of unemployment. b. It will make job-related information less costly and, therefore, tend to increase the rate of unemployment. c. It will make job-related information more costly and, therefore, tend to reduce the rate of unemployment. d. It will make job-related information less costly and, therefore, tend to reduce the rate of unemployment.