A sunk cost is one that
a. changes as the level of output changes in the short run.
b. was paid in the past and will not change regardless of the present decision.
c. should determine the rational course of action in the future.
d. has the most impact on profit-making decisions.
b
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Indicate whether the statement is true or false
Which of the following does not contribute to differences in interest rates?
a. Different loans are for different periods of time. b. Large loans generate more administrative costs per dollar than smaller loans. c. Different loans are subject to different tax rules. d. Loans to established businesses are evaluated differently from loans to new businesses. e. The longer the period of repayment, the greater the risk of higher-than-expected inflation.