Question

Give three examples of economic decisions you have made this week. Explain why each was an economic decision. What was the opportunity cost of each decision?

Answer 1

This past week, I've made economic decisions involving choosing to cook at home, buying a monthly bus pass, and saving part of my paycheck, all of which entailed assessing benefits, costs, and the opportunity cost associated with each choice.

Step-by-step explanation:

We as individuals engage in economic decisions every day due to the scarcity of resources. This week, I made several key economic decisions. First, I chose to cook dinner at home instead of dining out. This was an economic decision because I assessed the costs and benefits, deciding that cooking at home would save money. The opportunity cost was the dining experience and saved time that I would have enjoyed at a restaurant. Second, I purchased a monthly bus pass instead of paying for each ride individually. This decision was influenced by the trade-offs and my expected frequency of use, aiming to get more value in the long term. The opportunity cost here was the flexibility to use that money for other transportation options. Lastly, I decided to save a portion of my paycheck instead of spending it immediately. This decision highlights marginal decision making and prioritises future financial security over immediate gratification. The opportunity cost is the enjoyment or utility that I would have received from spending the money now.

Economic decisions are part of daily life and involve considering trade-offs and opportunity costs to make the best choices within the context of limited resources. Such decisions mirror the economic way of thinking, as we are constantly evaluating the marginal benefits and costs to maximize our utility.

Answer 2

Step-by-step explanation:

I do not have the capability to make economic decisions or engage in financial transactions. However, I can give some hypothetical examples of economic decisions that a person might make in a week:

Choosing between eating out at a restaurant or cooking at home: This is an economic decision because it involves considering the trade-offs between the costs and benefits of each option. Eating out at a restaurant may be more convenient but is typically more expensive than cooking at home. The opportunity cost of eating out would be the money saved by cooking at home, while the opportunity cost of cooking at home would be the time and effort required to prepare the meal.

Deciding whether to take an Uber or use public transportation: This is an economic decision because it involves considering the trade-offs between the costs and benefits of each option. Taking an Uber may be more convenient but is typically more expensive than using public transportation. The opportunity cost of taking an Uber would be the money saved by using public transportation, while the opportunity cost of using public transportation would be the time and inconvenience of waiting for and using public transportation.

Choosing between buying a new item or purchasing a used one: This is an economic decision because it involves considering the trade-offs between the costs and benefits of each option. Buying a new item may be more expensive but may come with a warranty and have a longer lifespan, while purchasing a used item may be cheaper but may have a shorter lifespan and fewer guarantees. The opportunity cost of buying a new item would be the money saved by purchasing a used one, while the opportunity cost of purchasing a used item would be the potential risks and drawbacks of using an item with a shorter lifespan or fewer guarantees.