Question

2. Define scarcity, tradeoffs and opportunity cost. Give three examples of important tradeoffs that you face in your life

Answer 1

Answer:

Since consumers' resources such as time, attention, and money are limited, they must choose how to best allocate them by making tradeoffs. The concept of trade-offs due to scarcity is formalized by the concept of opportunity cost. The opportunity cost of a choice is the value of the best alternative forgone