Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
opportunity cost
B
comparative advantage
C
marginal utility
D
diminishing returns
Understanding the Answer
Let's break down why this is correct
Answer
In economics, the concept that refers to the trade-off of one good or service for another is known as opportunity cost. This means that when you choose one option, you give up the chance to enjoy another option. For example, if you have $10 and decide to buy a book instead of going to the movies, the opportunity cost is the fun and experience you miss out on by not going to the movies. Understanding opportunity cost helps in making better decisions because it encourages you to think about what you are sacrificing with each choice. By defining this concept clearly, you can analyze your options more effectively and make more informed choices.
Detailed Explanation
Opportunity cost is the value of what you give up when you choose one option over another. Other options are incorrect because Comparative advantage is about who can produce something better or cheaper, not about trade-offs; Marginal utility refers to the extra satisfaction from using one more unit of a good.
Key Concepts
Effective question answering strategies
Opportunity cost
Production possibilities
Topic
Effective Question Answering Strategies
Difficulty
hard level question
Cognitive Level
understand
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