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Unformatted text preview: o Total costs are 20 billion per year o Does this imply that more flights would be justified? Not necessarily, benefit is 24/4=6, avg. cost is 20/4=5 But what would be gain from an additional flight and what is cost Relevant comparison is marginal benefit and marginal cost sunk costs o spent $500 on nonrefundable airline ticket to vacation spot over spring break. When time arrives, not feeling well and have a lot of work to do. Reluctantly decide to go because otherwise $500 would be wasted o is this a mistake? Depends: if given free ticket to destination, would u go? Iraq: do benefits from a surge in troops in Iraq exceed the costs? Regardless of whether we should have invaded Iraq, do the benefits from keeping troops exceed the costs?...
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- Spring '10
- Opportunity Cost