1.5.5 Business Choices

Question 1

Choices

Answer 1

In business, deciding between alternative uses of resources.

Question 2

Opportunity cost

Answer 2

When choosing between different alternatives, the opportunity cost is the benefit lost from the next best alternative to the one that has been chosen.

Question 3

Trade-offs

Answer 3

In business, where a decision- maker faces a compromise between two different alternatives; for example, between paying dividend to shareholders and re-investing profits in the business.