Making Economic Choices Flashcards
1
Q
How do we make economic decisions on a daily basis?
A
How we make decisions on a daily basis is often down to the price of a product or service. The price acts as a
signal to consumers who will compare the value of one product and service to another.
2
Q
What is opportunity cost?
A
The cost of any possible alternative when making a choice.
E.G If you bought a car this year you may not be able to afford to go away on holiday.
So, the opportunity cost of purchasing the car is the missed holiday.
When we are making such a choice we will attempt to consider the costs and benefits with both
options
