Question

Scarcity, opportunity cost, and marginal analysis Kyoko is training for a triathlon, a timed race that combines swimming, biking, and running. Consider the following sentence: Kyoko has only 20 hours this week that she can devote to training. Each hour she spends swimming is an hour that she can't spend biking or running. Which basic principle of individual choice do these statements best illustrate?
a) Kyoko can use time most efficiently by spending the same amounts of time on swimming, biking, and running.
b) Kyoko has an incentive to spend more time on swimming than on biking or running
c) People face trade-offs
d) People usually exploit opportunities to make themselves better off.

Answer 1

Answer:

C

Explanation:

Trade off can be expressed in terms of opportunity cost.

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

Kyoko has limited time so she has to choose between three activities. If she chooses one sport, she would not be able to partake in the other activities. So, she is trading off biking or running for swimming.

Trade off occurs because resources are limited and wants are unlimited.