Carol says the following to an economist: "I hate playing the guitar, but I have taken lessons for 10 years, so I might as well continue. There is a chance I will become a professional guitarist one day." An economist would probably make which of the following statements?
A)In a world of scarcity and unhappy alternatives, guitar playing may be your best bet.
B)You're right; it is better not to let all that time, energy, and money on guitar lessons go to waste.That would be uneconomical and irrational.
C)The music made by a guitar is nice; maybe you should stay with it, you may come to like it.
D)The cost you have incurred for guitar lessons is sunk.You should not allow something that can't be undone to influence a current decision.

Question

Quizplus · Accepted Answer

The economist would likely point out that the costs already incurred for guitar lessons are sunk costs, meaning they are past costs that cannot be recovered and should not influence future decisions. The rational choice should be based on future benefits and costs, not past investments.

Carol Says the Following to an Economist: "I Hate Playing