Arnold Kim began blogging about Apple products during his fourth year of medical school.Kim's Website, MacRumors.com, became so successful that he decided to give up his medical career and work full time on his Website, despite the nearly $200,000 he had invested in his education.In making his decision, Kim decided to ignore the money and time he spent on his education.Economists would say that Kim made a
A)rational decision to ignore these sunk costs.
B)poor decision since he had already invested his time and money on his medical career.
C)poor decision since doctors are in greater demand than bloggers.
D)hasty decision by not waiting to recoup his financial investment before giving up his medical career.

Question

Quizplus · Accepted Answer

Economists would argue that Kim made a rational decision to ignore the sunk costs of his medical education and instead focus on the potential future earnings and success of his website. Sunk costs refer to costs that have already been incurred and cannot be recovered, so they should not be factored into future decision making. By letting go of his medical career and focusing on his successful website, Kim was making a decision based on potential future benefits rather than past costs that could not be recovered.

Arnold Kim Began Blogging About Apple Products During His Fourth