Asked by Alessandro Godina on Jun 30, 2024
Verified
Andy wants to maximize his grade-point average. Having spent six hours studying for his final exam in economics, Andy calculates his grade and discovers that even with a perfect score on the final, he will not pass the course. He decides to study two more hours so he will not have wasted the first six hours. Is this a good decision? Why or why not?
Grade-Point Average
A numerical representation of a student's academic performance, averaged across all completed courses.
Economic Profit
is the surplus or gain realized when the total revenues generated by a business exceed the explicit and implicit costs of operation.
- Understand the concept of sunk costs and how they influence business decisions.
Verified Answer
ZK
Zybrea KnightJul 06, 2024
Final Answer :
The six hours spent studying for the exam should be viewed as a sunk cost and are not relevant to future considerations. Since he cannot pass the class, Andy should allocate the two hours to studying for an exam in a class he can pass.
Learning Objectives
- Understand the concept of sunk costs and how they influence business decisions.
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