Multiple Choice
Which scenario is the best example of an opportunity cost?
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0. Basic Principles of Economics
Scarcity and Choice
Multiple Choice
Which of the following situations best illustrates the concept of a trade-off due to scarcity?
A
A factory produces more goods without using any additional resources.
B
A person receives a free gift with no conditions attached.
C
A government prints more money to increase wealth.
D
A student decides to spend an extra hour studying instead of going out with friends.
Verified step by step guidance1
Understand the concept of scarcity: Scarcity means that resources are limited, so choosing more of one thing usually means having less of another.
Define a trade-off: A trade-off occurs when you give up one thing to gain something else because of scarcity.
Analyze each option to see if it involves giving up one thing to gain another due to limited resources.
Recognize that producing more goods without extra resources does not involve giving something up, so no trade-off is present.
Identify that the student choosing to study an extra hour instead of going out with friends clearly shows a trade-off, as time is limited and choosing one activity means sacrificing the other.
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