Opportunity Costs and Trade Offs.
- The cost expressed in terms of the next best alternative foregone or sacrificed.
- The true picture is, something is being sacrificed or involves having to give up something.
- For example, If you buy a £50 pair of shoes, you could be sacrificing going out with your friends during the weekend.
- Opportunity costs draw attention to the trade offs involved in making decisions.
- As there are limited resources; we cannot have everything we want, so we have to make decisions in what we want most - This involves Trade offs.
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