Question

Identify the opportunity cost of German travel company’s decision to offer holidays in Maldives?

Answer 1

Answer:

A German travel company decides to stop selling holidays in Italy and instead to offer holidays in a new destination. This is the Maldives, a group of island in the Indian Ocean, famous for their long hours of sunshine and sandy beaches.

Tourism is a fast growing industry. Not all families, however, are able to go on holidays whether at home or abroad. Most of those who take holidays would like to have more holiday breaks.

a. What evidence is there in the passage of scarcity?

b. Using examples identify three factors of production involved in providing holidays in the Maldives?

c. (i) Explain the difference between economic goods & free goods.