Question: What’S The Difference Between A Trade Off And An Opportunity Cost?

What is the example of opportunity cost?

The opportunity cost is time spent studying and that money to spend on something else.

A farmer chooses to plant wheat; the opportunity cost is planting a different crop, or an alternate use of the resources (land and farm equipment).

A commuter takes the train to work instead of driving..

What is opportunity cost explain with example?

When economists refer to the “opportunity cost” of a resource, they mean the value of the next-highest-valued alternative use of that resource. If, for example, you spend time and money going to a movie, you cannot spend that time at home reading a book, and you can’t spend the money on something else.

How does opportunity cost affect your life?

Opportunity costs apply to many aspects of life decisions. Often, money becomes the root cause of decision-making. If you decide to spend money on a vacation and you delay your home’s remodel, then your opportunity cost is the benefit living in a renovated home.

What are three examples of important trade offs that you face in your life?

Answer. 1) after opening the eye at first and of deciding that this world is our rival or a friend. 2) choosing the streams English or commerce or Science. 3) death as the trade off that we have to face in our life.

What is an example of an emotional trade off?

For example, people seem to resist “putting a price on” life or justice by trading off these attributes with monetary attributes and often express distress and/or refusal when asked to do so (Baron 1986; Baron and Spranca 1997).

What is the difference between a trade off and an opportunity cost quizlet?

A decision is made between one or more options. A trade-off is all alternatives given up when choosing one option. … Opportunity cost is the most desirable alternative given up as the result of a decision.

Can opportunity cost be something other than money?

Opportunity cost does not necessarily involve money. It can also refer to alternative uses of time. … Pay down debt now, or use the money to buy new assets that could be used to generate additional profits.

What is the best definition of opportunity cost?

In microeconomic theory, opportunity cost, or alternative cost, is the loss of potential gain from other alternatives when one particular alternative is chosen over the others. In simple terms, opportunity cost is the loss of the benefit that could have been enjoyed had a given choice not been made.

Why are trade offs unavoidable?

Reduce prices and create jobs. This is the ideal economic outcome expected from all businesses today, not only in the long run, but also in the short term. Generally, lower prices allow more consumers to consume goods or services.

What is meant by trade off in economics?

In simple terms, a tradeoff is where one thing increases, and another must decrease. … In economics, a trade-off is commonly expressed in terms of the opportunity cost of one potential choice, which is the loss of the best available alternative.

Why is opportunity cost important?

Opportunity Cost helps a manufacturer to determine whether to produce or not. He can assess the economic benefit of going for a production activity by comparing it with the option of not producing at all. He may invest the same amount of money, time, and resources in another business or Opportunity.

What is another word for trade off?

balance, set-off, disadvantage, contradiction, arbitrage, equilibrium, Equilibria, arbitrate, refereeing, ‘arbitrage, quandary, accommodation, trade, counterparty, agreement, setoff, trading, give-and-take, equalisation, conundrum, counterbalance, bargain, drawback, swap, adjudicative.

What is the concept of opportunity cost?

What Is Opportunity Cost? Opportunity costs represent the potential benefits an individual, investor, or business misses out on when choosing one alternative over another. The idea of opportunity costs is a major concept in economics.

Which situation is the best example of opportunity cost?

It is the important concept in economics and also the relationship which is between choice and scarcity. A good example of opportunity cost is you can spend money and time on other things but you can not spend time reading books or the money in doing something which can help.

What is a trade off give at least one example?

Give at least one example. A trade-off is an exchange in which one benefit is given up in order to obtain another. Example: a material may be used to build a house because it is attractive to customers even though it is not as durable.

What are benefit trade offs?

Risk-benefit trade-off refers to the balance of negative and positive effects on achieving a goal, such as health. For medical decisions, a risk-benefit trade-off usually refers to the perception of the anticipated balance of improvements and deteriorations in health from a given choice.

What is an example of a trade off?

In economics, a trade-off is defined as an “opportunity cost.” For example, you might take a day off work to go to a concert, gaining the opportunity of seeing your favorite band, while losing a day’s wages as the cost for that opportunity.

What is your opportunity cost of taking this course?

Your opportunity cost of taking this course is: … the cost of the activity you would have chosen if you had not taken the course.