Interesting Facts in Introduction to Economics

• Sunk Cost
  • Not fully understood before (blu3mo)
  • Costs incurred in the past should not influence future decisions
    • Instead of focusing on “costs incurred,” one should consider “future benefits generated by costs incurred”
• The taxpayer and the actual burden bearer may be different individuals
• Opportunity Cost, Opportunity Loss
  • Also used casually before (blu3mo)
  • There were interesting implications upon understanding
    • Implicit opportunity costs and explicit other costs are considered the same cost in calculations
  • Helps in recognizing the presence of cognitive biases similar to the endowment effect