Question

Adam has $200 to spend and wants to buy either a new amplifier for his guitar or a new cell phone. Both the amplifier and the cell phone cost $200, so he can only buy one. This illustrates the basic concept that:

Answer 1

Answer:

people face trade offs

Explanation:

Because wants are unlimited and the resources used to satisfy those wants are limited, people have to face trade offs. these trades off are opportunity costs.

Opportunity cost or implicit is the cost of the option forgone when one alternative is chosen over other alternatives.

In this question, the wants are a cell phone or an amplifier. the resource is $200. If the amplifier is bought, the cell phone cannot be purchased. This is an example of a trade off