
What is opportunity cost?
ASU economist explains the key differences between opportunity and sunk costs, two concepts that heavily shape decision-making.
In this story published March 11, 2025, on The Motley Fool:
Opportunity costs and sunk costs are two distinct concepts. For example, the opportunity cost of employment is the value of leisure time, including cooking at home, that one sacrifices by accepting a job. In contrast, sunk costs refer to expenses or efforts incurred by an entrepreneur to start a business that cannot be recovered if the entrepreneur decides to close the business. Therefore, the opportunity cost of employment is not considered a sunk cost, as one can regain the value of leisure and cooking by quitting the job.
– Domenico Ferraro, associate professor of economics
Latest news
- ‘Big league’ or big illusion? Study calls time on splashy stock market anomalies
In his latest research, an ASU professor invents a stock market anomaly to expose the shaky…
- Why wealthy Americans work
An ASU economist’s research shows the affluent work not for more stuff, but for better stuff —…
- Accounting professional Min Zhang joins master's program to level up skills
Min Zhang (MACC '25) had been working in accounting in her home country of China for five years…