1.5.5 Business choices

Question 1

opportunity cost definition

Answer 1

the cost of foregoing the next best alternative

Question 2

the problem (why opportunity cost)

Answer 2

limited recourcwsa
wants unlimited
causes scarcity
business nedds to decide how best to use those recources –> cost of these choices of not choosing the other option

Question 3

defintion trade-off

Answer 3

when less of one is exchanged of more of the other (compromise)

Question 4

explain trade-off

Answer 4

only so much capital and recaources
less of one thing e.g. marketing to do more of sth e.g. new machinery
called compromise = trade-off