trade of and opportunity cost Flashcards
What is a trade off?
A trade off is when an action taken means that an alternative action was not taken.
Give an example of a trade off.
Choosing to study Economics as an A Level means sacrificing another subject, e.g., History.
What percentage of the government’s budget is spent on education?
13.2% of its budget.
What must the government do to increase its expenditure on education?
Spend less money elsewhere.
What is an opportunity cost?
The measurement of the value of the trade off.
Does a trade off indicate if the decision was worthwhile?
No, it does not tell us if a trade off is worthwhile or not.
Define opportunity cost.
The value of what was forsaken.
What does opportunity cost value?
The action we did not take.
If I buy a Mars Bar instead of a Bounty, what does it signify?
I sacrificed the Bounty for the Mars Bar.
What happens if I value the Bounty more than the Mars Bar?
It results in a high opportunity cost.
What was the transfer fee for Paul Pogba?
£89.3 million.
What was the transfer fee for Kevin De Bruyne?
£55 million.
What was the trade off for Manchester United in acquiring Pogba?
Pogba vs De Bruyne + £33.1 million.
True or False: A high opportunity cost means the chosen option is more beneficial than the alternative.
False.
Fill in the blank: Opportunity cost values the action I _______ take.
didn’t
