Other

Question

You spend an entire Saturday going to car dealerships in search of a used

car. You spend hours looking at cars and even test drive a few, but there are

none you like that fit your budget. What is the sunk cost you should ignore

when deciding whether or not to buy a car that day?

* 1 po

• The cost of the car

• The cost of the warranty

• The time it will take to drive home

• I The time you spent looking for cars that day

Answer

The time you spent looking for cars that day.

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The sunk cost is the cost that has already been incurred and cannot be recovered. In this case, the sunk cost would be the time you spent...