You have been invited by friends to fly to Germany for October fest next year. For international travel, you apply for a passport that costs $97 and is valid for 10 years. After you receive your passport, your travel companions decide to cancel the trip because of “insufficient funds.” You decide to also cancel your travel plans because traveling alone is no fun. Is your passport expense a sunk cost or an opportunity cost? Explain your answer.

You have been invited by friends to fly to Germany for October fest next year. For international travel, you apply for a passport that costs $97 and is valid for 10 years. After you receive your passport, your travel companions decide to cancel the trip because of “insufficient funds.” You decide to also cancel your travel plans because traveling alone is no fun. Is your passport expense a sunk cost or an opportunity cost? Explain your answer.

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter2: Economic Tools And Economic Systems

Section: Chapter Questions

Problem 2QFR

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Which of the following is an example of an implicit cost associated with an action? - the cost of materials in undertaking a new renovation on your home -the hourly wage you could be earning instead of enjoying your leisure time -the tuition fee that a student pays for a term of college -the time a parent can't spend with their children because they are working there could be more then one correct choice
Implicit costs are defined by economists as nonmonetary opportunity costs. Why is it important for a firm to take these costs into consideration when evaluating a potential activity, when they don’t involve any monetary expense?
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Hello! Would you be able to professionally assess my answer for accuracy to the following question below? Thank you in advance! Question You won a ticket to a hockey playoff game by having your name drawn from a hat at a charity event. You were excited about going, but on the day of the game, a major snowstorm has hit and conditions are miserable. Would you be more likely to go if you had bought the ticket yourself instead of winning it? Relate your answer to opportunity costs and sunk costs. My Answer: If I bought the hocky playoff ticket myself and decided to stay home and not go to the game due to a major snowstorm and the resulting conditions, the opportunity cost would be watching the hockey playoff game in person. Because the ticket is already purchased, if I would be unable to resale the ticket (it may be quite difficult to resale from home the day of the game, particularly during a major storm), the price of the ticket would be a sunken cost, a past expenditure unable to be…
You have just woken up and are trying to decide whether to attend an upcoming lecture. The following are the costs and benefits you are considering. Tuition is $7,000 per semester; Books are $500 per semester; Driving to class is $10; Wages earned if you went to work instead are $35; How much you value an extra hour of sleep = $25; The cost of tuition and books ___________ be included in your calculations because they are an example of ________________ costs. Group of answer choices A)should not; sunk B)should; sunK C)should; marginal D)should not; marginal E)should; opportunity
Your firm specializes in recycling used plastics into consumer goods. You have three production opportunities: 1. You can produce plastic utensils for a revenue of $30,000 while production will cost $15,000. 2. Alternatively, you can produce lampshades: you calculate that at the optimal production, you expect to sell 2,000 lampshades every year at $10 each, and your average total cost per lampshade will be $2. 3. You also have the option to shut down your factory and produce nothing at a cost of $1,000 a year. Which opportunity do you choose? 4 Instead of working hard, Kendall Square Inc’s manager can shirk and not improve costs. In order to incentivize her hard work, Kendall Square Inc’s shareholders want to give the manager a bonus if they see that variable costs are cut by half. What is the maximum bonus that shareholders would be willing to give?
What is a sunk cost? Provide an example of a sunk cost other than one from this book. Why are such costs irrelevant in making decisions about future actions?
Question 30 Link and Zelda each have 12 hours a week they can spend making costumes and accessories for their cosplay group. Link has been doing this for years and can make a costume piece in 2 hours and an accessory item in 1 hour. Zelda is still learning and can make a costume piece in 3 hours and an accessory item in 2 hours. The opportunity cost of 1 costume piece for Link in terms of accessory items (i.e. accessory items per costume piece):
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Is this a good example of opportunity cost? “In 2019, I started my small business by selling prints of my photographs. Now it’s temporarily closed. During this time I had the option of shipping my prints through USPS or UPS. I decided to ship my prints through USPS instead of UPS since it was a bit expensive at the time. My prints that were shipped out from USPS arrived in time and came in good condition. The opportunity cost is the cost of UPS shipping and being able to ship out international orders. “
Is this example also an example of economically rational decision making? “In 2019, I started my small business by selling prints of my photographs. Now it’s temporarily closed. During this time I had the option of shipping my prints through USPS or UPS. I decided to ship my prints through USPS instead of UPS since it was a bit expensive at the time. My prints that were shipped out from USPS arrived in time and came in good condition. The opportunity cost is the cost of UPS shipping.”