Oscar purchased a $30 steak for dinner, but burned it bad on the grill. Since he paid top dollar for the steak he figures he should eat it anyways. Is Oscar properly using economic reasoning? Yes, the marginal cost of not eating the steak would be $30. No, the $30 spent on the steak is a sunk cost and should not be included in his decision whether to eat the steak or not... Yes, if he doesn't eat the steak he will have wasted economic resources. No, the opportunity of eating the steak is whatever else he could have purchased for the $30.
Oscar purchased a $30 steak for dinner, but burned it bad on the grill. Since he paid top dollar for the steak he figures he should eat it anyways. Is Oscar properly using economic reasoning? Yes, the marginal cost of not eating the steak would be $30. No, the $30 spent on the steak is a sunk cost and should not be included in his decision whether to eat the steak or not... Yes, if he doesn't eat the steak he will have wasted economic resources. No, the opportunity of eating the steak is whatever else he could have purchased for the $30.
Chapter6: Population Health
Section: Chapter Questions
Problem 8QAP
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