Question

Economists state that every decision involves trade-offs. Economists measure and define these trade-offs as: a. productions possibilities curve. c. circular flow of economic activity. b. paradox of value. d. opportunity costs. Please select the best answer from the choices provided

Answer 1

Option D i.e Opportunity Costs is the correct answer.

Economists define trade-offs in simple terms as a situational decision where a person chooses a thing over the sacrifice of another thing,owning to limited resources and time.

Opportunity Cost of a choice is what you gave up to get it. For example, you gave up the idea of watching movie tomorrow in order to go for a dinner.

Answer 2

The correct answer is D, opportunity costs. Making (economic) decisions requires trading off one good, service or experience against another. Most of us cannot acquire everything we want, so often we have to make decisions on what to buy or how to invest our limited resources - eating out or going to the movies, buying that video-game or saving the money for a new bicycle, traveling to the mountain or to the beach. By choosing one rather than the other, we are trading off, that is, making a sacrifice and renouncing to our other preferred choice. In these examples, if you decide to go to the movies, the opportunity cost is the loss of the possibility of eating out.