alleryStart learning →Sunk costs should not affect a current decision because they:
AAre always very small
BAre always very large
CChange with the choice
DCannot be recovered
Answer & Solution
Correct answer: D. Cannot be recovered
1. A decision can only change what happens from now on.
2. Sunk costs are costs that were incurred in the past and cannot be recovered.
3. The budget constraint framework assumes that they should not affect the current decision.
4. Since no choice can bring that money back, it is irrelevant to comparing the options.
_Source: OpenStax Principles of Microeconomics for AP(R) Courses 2e (CC BY 4.0), Ch 2 'Choice in a World of Scarcity', sections 2.1-2.3_
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