Question

you make a clay pot for $10 and sell it to a customer for $40. what is your economic surplus associated with the transaction?

Answer 1

The transaction's surplus in terms of the economy $30

Which principle states that the next-best choice you must forego in order to have something is its true cost?

The idea of opportunity cost, which states that the opportunity lost as a result of a decision, determines the true cost of an economic decision, is closely tied to the principle of substitution.

What is a sunk cost, give an example, and explain why it doesn't matter when deciding what to do in the future?

Sunk costs are viewed as bygone in economic decision-making and are not taken into account when determining whether to continue an investment project. Spending $5 million to establish a plant that is expected to cost $10 million is an example of a sunk cost.

To Know more about sunk cost

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