Which one of the following decisions most clearly reflects a lack of understanding of the concept of sunk costs?
a. You pay to have your car towed back to the repair shop because it was not fixed properly the first time.
b. You decide to get a master's degree because you cannot find a job in the field in which you majored.
c. You decide to purchase a piece of machinery for your business that will eliminate three employees' positions.
d. You study eight hours for a final exam even though there is no way now that you can pass the course.
D
You might also like to view...
The General Agreement on Tariffs and Trade and the World Trade Organization have resulted in
A) termination of export subsidies applied to manufactured goods. B) termination of import tariffs applied to manufactures. C) termination of import tariffs applied to agricultural commodities. D) termination of international theft of copyrights. E) a number of rounds of multilateral trade agreements.
This figure shows the payoffs involved when Sarah and Joe work on a school project together for a single grade. They both will enjoy a higher grade when more effort is put into the project, but they also get pleasure from goofing off and not working on the project. The payoffs can be thought of as the utility each would get from the effort they individually put forth and the grade they jointly receive.The game in the figure shown is a version of:
A. a repeated game. B. a sequential game. C. the prisoner's dilemma. D. the first-mover advantage.