Asked by Laura Nevins on Mar 10, 2024

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Susie purchased a nonrefundable ticket to a soccer match for $20. It will cost her $10 worth of gas and wear and tear to drive to the match and $5 to park her car. On the day of the match, Susie's boss offers her $100 to come to work instead. In considering what to do, which of the above would be considered a sunk cost?

A) The $20 ticket to the match.
B) The $10 cost to drive to the match.
C) The $5 cost to park at the stadium.
D) The $100 offered by Susie's boss.

Sunk Cost

Past expenses that have already been incurred and cannot be recovered or altered.

Nonrefundable Ticket

A type of ticket purchase that cannot be returned for a refund. These tickets generally offer a cost advantage but less flexibility.

Wear and Tear

The damage or deterioration resulting from ordinary use over time.

  • Analyze the decision-making process in the presence of sunk costs.
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JP
Jayleen Paculan

Mar 10, 2024

Final Answer :
A
Explanation :
The $20 ticket to the match is a sunk cost because it is a cost that has already been incurred and cannot be recovered, regardless of whether Susie goes to the match or not. The costs to drive and park would only be incurred if she decides to go to the match, and the $100 offer is a potential income, not a cost.