Question

"Scarcity, opportunity cost, and marginal analysis Neha is training for a triathlon, a timed race that combines swimming, biking, and running. Consider the following sentence: Each hour she spends swimming is an hour that she can't spend biking or running. Which basic principle of individual choice does this sentence best illustrate?1)Neha has an incentive to spend more time on swimming than on biking or running.2)People usually exploit opportunities to make themselves better off.3)All choices have opportunity costs.4)Neha can use time most efficiently by spending the same amounts of time on swimming, biking, and running."

Answer 1

Answer: Option (3) is correct.

Explanation:

Correct option: All choices have opportunity costs.

Opportunity cost is the benefit that is foregone for an individual by choosing one alternative over other alternatives available to him.

If the opportunity cost is lower for an individual then this will benefit him whereas if the opportunity cost is higher then this will not benefit the individuals.

In our case, Neha is training for a triathlon, there are three activities involved in a triathlon and training hours are limited. If Neha wants to spend a hour on swimming then she have to sacrifice training for biking and running for during that time.

Therefore, every choice has an opportunity cost associated with it.