Question

Betty runs a boutique. She buys semi-automatic sewing machines for her tailors because she cannot afford the fully automatic ones. This scenario best illustrates the concept of _____.

Answer 1

Betty's decision to purchase semi-automatic sewing machines due to affordability constraints is an illustration of the economic concept of tradeoffs, which occurs when limited resources require decision-making on their allocation.

Step-by-step explanation:

The scenario of Betty running a boutique and choosing semi-automatic sewing machines over fully automatic ones because of affordability issues illustrates the economic concept of tradeoffs. Tradeoffs occur because resources are scarce, and economic agents must make decisions on the best way to allocate their limited resources to satisfy their needs and wants. This concept ties closely to the production possibilities frontier, which demonstrates the different combinations of goods and services a business or economy can produce with limited resources.

Additionally, decisions like Betty's highlight the importance of consumer choices and how these choices influence the allocation of resources within an economy. Consumers and business owners face tradeoffs every day, where they have to decide between different goods, services, and investments based on their budget constraints and economic objectives.