Sunk costs are costs that have already been incurred and cannot be recovered or reversed. They do not reflect the best alternative use of money, are not refunded, do not specifically arise from illegal use of inputs, and do not include marginal opportunity costs.

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Sunk Costs

Question 21

Multiple Choice

Sunk costs

A) reflect the best alternative use of your money.
B) will eventually be refunded.
C) arise from illegal use of inputs.
D) include marginal opportunity costs.
E) cannot be reversed.

Correct Answer: