Which of the following is an example of a sunk cost?
A) after you start watching a movie, the $8 you paid for the ticket
B) the $100,000 a shoe factory will pay for the leather it uses to make shoes
C) the electricity purchased by a horse breeder
D) the $10 being spent on gasoline purchased by a traveling salesperson
E) the $6,000 Tommy's insurance company pays him after an accident.

Question

Quizplus · Accepted Answer

A sunk cost is a cost that has already been incurred and cannot be recovered. In this case, the $8 spent on the movie ticket is a sunk cost because once the ticket is purchased and the movie is started, the money cannot be recovered.

Which of the Following Is an Example of a Sunk