Explain why the scarcity of resources causes people and nations to consider opportunity costs and trade-offs among choices. Give a personal example of an opportunity cost that you have faced and the impact of the decision you made.
Answer: Scarcity of resources can be regarded as the prime reason for opportunity cost as you're allowed to choose only one alternative among two and leave the other due to the inability of you to pay for both. This happens only because resources are scarce. One important decision regarding opportunity cost in my life is opting for graduation over work where the opportunity cost is the amount lost because I've not worked and here the limited resource is time and this indeed allowed me to pursue education where I would come up with more engaging salary than my opportunity cost which is a good sign and the decision I've taken is correct
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In the Mundell-Fleming model, all of the following are true EXCEPT:
a. the intersection of the IS and LM curves determine the equilibrium exchange rate. b. the BP curves position is determined by the exchange rate. c. the policy choice between fixed and floating exchange rates shifts the BP curve. d. the extent of capital mobility determines the slope of the BP curve. e. all of the above are true.
When the ownership of the different stages of production of a commodity lies with different individuals, it becomes difficult to take decisions on capacity expansion because of all the following reasons, EXCEPT:
a. differences in attitudes toward risk. b. differences in motivation. c. different degrees of risk exposure. d. different abilities to hedge themselves.
In the late 1800's deflation caused farmers to suffer as the fall in crop prices reduced their income and thus their ability to pay off their debts
a. True b. False Indicate whether the statement is true or false
Why does competition force firms to use the least-cost, most efficient, productive techniques?
Please provide the best answer for the statement.