1.5.5 - Business Choices

Question 1

What is OPPORTUNITY COST?

Answer 1

the COST of the LOSS of the ITEM NOT CHOSEN, or the Profit from the Goods Not Produced, the cost of foregoing the next best alternative

Question 2

What is a TRADEOFF?

Answer 2

when LESS of ONE is EXCHANGED for MORE Of ANOTHER.
also known as a Compromise

e.g. marketing in order to do more of something else e.g. new machinery for production

Question 3

What is a Trade-off Example for Cars Vs Vans

Answer 3

one Factory can Produce either Cars or Vans, or some of each with the Limited Resources available to it

to Increase Car Production, Resources must be Shifted Away from Van Production