business choices Flashcards
1
Q
What is an opportunity cost?
A
The value of the next best alternative foregone.
2
Q
Why do we have opportunity costs?
A
Land, labour, capital (money put into the business) and enterprise are limited resources
However our wants are unlimited
This causes scarcity
3
Q
What is a trade off?
A
In business to achieve two things may not be possible, as there is only so much capital and only so much of other resources.
Essentially a trade off is a compromise.
