What is the sunk cost fallacy?

A Investing in sinking ships

B Continuing a course of action because of previously invested resources, even when it's no longer beneficial

C Calculating the true cost of sunken treasures

D A mistake in financial accounting

✓ Correct Answer: Option B

The sunk cost fallacy occurs when people continue investing in something because of what they've already spent (time, money, effort), rather than evaluating future value.

💡 Why is B) the correct answer?

The correct answer to the question "What is the sunk cost fallacy?" is Option B: Continuing a course of action because of previously invested resources, even when it's no longer beneficial.

The other options — A) Investing in sinking ships, C) Calculating the true cost of sunken treasures, D) A mistake in financial accounting — are incorrect for this General Knowledge question. As explained above: The sunk cost fallacy occurs when people continue investing in something because of what they've already spent (time, money, effort), rather than evaluating future value.

📚 About This General Knowledge Practice Question

This 2-level General Knowledge question from the World History topic is part of One Paper Preparation's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free General Knowledge practice test or use flashcards for spaced repetition review.

Practice General Knowledge Quizzes → Browse All Questions Study Flashcards

What is the sunk cost fallacy?

✓ Correct Answer: Option B

📚 About This General Knowledge Practice Question

Related General Knowledge Questions