Question

Ethan received a gift card and was considering three options: digital camera, cell phone, and video games. After carefully thinking about it, Ethan narrowed his decision down to the digital camera and the cell phone. Finally, Ethan chose the cell phone. In 3-5 sentences, define opportunity cost and trade-off and then explain the opportunity cost and trade-off of Ethan's decision.

Answer 1

The opportunity cost was the camera, as it was the next best thing in his decision. The trade-off was the video games, as it was the first thing eliminated in his decision. There can be many trade-offs in a decision but only one opportunity cost, as trade-offs are everything eliminated and opportunity costs is the option that is not chosen out of the last two choices.

Hope this helps :)

Answer 2

The opportunity cost is the camera, it was the next best thing.  His trade-off was the video games.  An opportunity cost is the next best thing in line.  A trade-off is the option eliminated first, there can be many trade-offs but only 1 opportunity cost.