Question

Manuel is training for a triathlon, a timed race that combines swimming, biking, and running.

Consider the following sentence: In order to swim for an hour, Manuel must take time away from work, where he earns $12 per hour. This is in addition to paying a $4 entrance fee for the pool.

Which basic principle of individual choice do these statements best illustrate?
1) The cost of something is what you give up to get it
2) Markets are usually a good way to organize economic activity
3) People usually exploit opportunities to make themselves better off.
4) Trade can make everyone better off

Answer 1

1) The cost of something is what you give up to get it

Step-by-step explanation:

There are unlimited wants but limited resources available to satisfy these wants. Hence a scale of preference which shows these wants in order of importance is developed.

Due to the limited resources, not all wants can be satisfied hence the concept of opportunity cost which is the cost of the alternative forgone.

In this situation, the opportunity cost for swimming is the $12 that would have been earned if he had gone to work.

Answer 2

1) The cost of something is what you give up to get it

Step-by-step explanation:

Manuel is giving up earning $ 12 in his job for an hour swimming. Where he also has to pay an entrance fee of $ 4 for the pool. The real cost to him for swimming an hour is: $16.