ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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opportunity costs happen because of trade offs
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opportunity costs are the opposite of trade offs
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trade offs lower the opportunity cost of an economic decision
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trade offs occur when there are no opportunity costs
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Detailed explanation-1: -Which of the following best describes the relationship between trade-offs and opportunity costs? As you give up consumption or production of one good over another, an opportunity cost is incurred.
Detailed explanation-2: -The relationship between trade offs and opportunity costs is that trade offs create opportunity costs. A trade off is a choice, where an individual gives up one thing to acquire another.
Detailed explanation-3: -Trade-offs create opportunity costs, one of the most important concepts in economics. Whenever you make a trade-off, the thing that you do not choose is your opportunity cost. To butcher the poet Robert Frost, opportunity cost is the path not taken (and that makes all the difference).
Detailed explanation-4: -The difference between trade offs and opportunity cost is that a trade-off is all the resources that are lost when a consumer makes a choice. An opportunity cost is the most desirable opportunity given up when a consumer makes a choice.
Detailed explanation-5: -Which of the following statements best describes trade-offs? With a trade-off, it is necessary to give up some of one good to gain more of the other good.