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What is the difference in a trade-off and opportunity cost?
Trade-off implies the exchange of one thing to get the another. Opportunity cost implies the value of choice foregone, to get something else.
What is an example of a trade-off?
An opportunity cost example of trade-offs for an individual would be the decision by a full-time worker to take time off work with a salary of $50,000 to attend medical school with an annual tuition of $30,000 and earning $150,000 as a doctor after 7 years of study.
What is the difference between a tradeoff and opportunity cost quizlet?
The difference between trade offs and opportunity cost is that a trade-off is all the resources that are lost when a consumer makes a choice. An opportunity cost is the most desirable opportunity given up when a consumer makes a choice. You just studied 8 terms!
What is a trade-off and give one example?
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 an example of tradeoff in government spending?
Trade-offs abound in government as well: Increased security at airports tends to lead to less convenience for travelers. Increased oversight over government spending often means increased paperwork and more bureaucracy.
What is a trade-off in economics?
The term “trade-off” is employed in economics to refer to the fact that budgeting inevitably involves sacrificing some of X to get more of Y. With a fixed amount of savings, one can buy a car or take an expensive vacation, but not both. The car can be “traded off” for the vacation or vice versa.
What is an example of trade-off that a car company might make?
For example, a trade-off would be buying an expensive luxury car, or paying for college . An opportunity cost is the most desirable opportunity given up when a consumer makes a choice, i.e. attending college and getting an education while foregoing a luxurious sports car.
Which scenario is the best example of an opportunity cost?
The correct answer is a. A computer company produces fewer laptops to meet tablet demand.
What are the opportunity costs for entrepreneurs example?
For example, If a company generates $20 selling one dress that costs $10 to produce, then its total profit is $10. However, if they could have made shorts with revenue of $20 and costs of $5, there could be an opportunity cost of $15.
What is meant by trade-off in economics?
What is the opportunity cost of eating out?
If the next-best alternative to eating out is eating at home, then the opportunity cost of eating out is the money spent. In addition, another opportunity cost is the experience you forgo by not eating a home-cooked meal. In other words, the opportunity cost is the value of the next best use of your resources.
Is rent an opportunity cost?
Economic rent is also independent of opportunity cost, unlike economic profit, where opportunity cost is an essential component. Economic rent is viewed as unearned revenue while economic profit is a narrower term describing surplus income earned by choosing between risk-adjusted alternatives.
Is land an opportunity cost?
For example, if an individual owns 100 acres of farmland, he or she has the decision of either farming the land or renting it to a neighbor. If he or she farms the land, the opportunity cost is the income foregone by not renting it to a neighbor.
What is the opportunity cost of eating the home cooked meal?
What is the opportunity cost of eating the home-cooked meal? Opportunity cost is defined as the value of the next best alternative. In this case your next best alternative is to get a five-dollar dinner at Burger Joint. If you do that, you will enjoy the value of that meal.
How does an opportunity cost differ from a trade off?
Opportunity cost . In this scenario the opportunity costis the sacrifice you make by investing in one ETF versus investing in the other.
What is the difference between trade – off and opportunity cost?
Opportunity cost or alternative cost,as the name suggest,is the cost of opportunity lost,i.e.
How are trade offs and opportunity cost alike?
• Trade off and opportunity cost are two concepts that are made use of in many situations in life. • Though similar in meaning, trade off is sacrificing one thing to get another while opportunity cost is the cost incurred by losing out on one thing to get another.
How are trade-offs and opportunity costs different?
Definition of Opportunity Cost and Trade off. While opportunity cost is the cost of opting one course of action and foregoing another opportunity,a trade-off is the course of action