Assume that you have been waiting in line for one hour at the Department of Moto
ID: 1132073 • Letter: A
Question
Assume that you have been waiting in line for one hour at the Department of Motor Vehicles to renew your license. You comment to the person next to you that you really have some important things to do and you are seriously thinking of getting out of the line and returning to renew your license tomorrow. The person responds by telling you that you are making a big mistake since the time that you have spent waiting in line is an investment and that you should not waste it. Evaluate critically this person’s response
Explanation / Answer
Answer-The time spent waiting in line is a sunk cost. It has already been “spent” in the sense that you cannot get it back. Therefore, the only thing that should be of concern to you now is the opportunity cost of any further time that you might spend in the line. The time spent in the line is therefore irrelevant to what you are going to do next.