Question

Answer the following questions. a. Marcielis enrolled in a Principles of Mieroeconomics class but mistakenly buys a macroeconomics book from eBay and cannot return it. She paia $80 for the book. Marcie's friend tells Marcie to head the macroeconomics book or otherwise she will have lost her 1580. Explain whether you agree with Marcie's friend bureter is taking Intermediate Economics and decides to drop the lourse after the second midterm, Peter paid $180 for the course textbook, which can be resold for $70 on barnesandnoble Visi Peter's sunk cost for the textbook?

Answer 1

Answer 10a

I disagree with Marcie's friend. The $80 lost on the macroeconomics book cannot be recovered , neither should it be recovered on forgoing the opportunity to study microeconomics. What Marcie should do is invest in a Microeconomics book and study her subject. Studying the Macroeconomics book is futile.

Answer 10 b

Sunk cost is any cost that cannot be recovered back. Here Peter paid $180 Intermediate Economics course textbook. And it is also mentioned he can recover only $70 on selling the book in the internet. Thus his sunk cost is $180-$70=$110.