What's The Deal Dirk?

Student Q&A's with Dirk

Can you give me an example of a sunk cost? The definition is still a little abstract to me.

This question asked by Anonymous

Try thinking of your car. If you decide to keep your old car (because it still runs) when you'd get a lot more enjoyment from a new vehicle, this is an example of sunk cost. Good economists learn to exchange items (even if they are fully paid for) for better products that are more useful.

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