- In Kreider’s “daughter lemonade example”, if his daughter is trying to find her profit, it will be greater with…
- Accounting profit
- Accounting principle
- Economic profit
- Economic principle
- Which includes the loss of potential gain from other alternatives when one alternative is chosen?
- Economic principle
- Accounting profit
- Economic profit
- Sunk cost
- If economic profit were zero, then accounting profit would be…
- Less than zero
- More than zero
- Equal to zero
- Not enough information to tell
- Why is college “more expensive” for a thirty year old vs. an 18 year old?
- For a 30 year old, implicit cost would be lower because of housing costs.
- For an 18 year old, implicit costs are higher because they have to pay for campus housing.
- For a 30 year old, implicit costs would be higher because their higher-salaried occupation started years later than an 18 year old.
- For a 30 year old, because college tuition raises annually.
- Eventually, holding other things constant, as we hire more workers…
- Total quantity decreases and marginal labor decreases
- Total quantity increases and marginal labor decreases
- Total quantity decreases and marginal labor increases
- Total quanitiy increases and marginal labor increases
- What is a sunk cost?
- A cost that can not be recovered
- A cost that should not be accounted for
- A cost that you have not paid yet
- A and B
- All of the above
- Mark has $25. If Mark spends $5 and wins $10 (so at $30), then (at $30) his utility will be 174. What will Mark’s utility be if he spends $5 and wins nothing (at $20), if Mark’s average utility of gamble is 167.5?
- 159
- 167.5
- 165.5
- 169
- 172
Discounting the future with opportunity costs – start investing earlier in pharmacists vs. doctor
On exam – sunk cost
Sunk cost – out of your control because it’s already been paid in the past
-question on definition and question on importance
important – can’t get a refund or get your money back, it’s important not to consider sunk cost when making financial decisions