Martin Chuzzlewit purchased a vacant lot outside of London for 1,350,000 because he heard that a shopping mall was going to be built on the other side of the road. He figured that he could make a bundle by putting in a fast-food outlet on the site. As it turned out, the rumor was false. A sanitary landfill was located on the other side of the road, and Martins land was worthless. ( denotes the British monetary unit, pounds sterling.) Required: With respect to the economic characteristics of costs, what type of cost is the 1,350,000 that Chuzzlewit paid for the vacant lot?

Multiple Choice

• Opportunity cost

• Administrative cost

• Sunk cost

• Selling cost

• Differential cost