To Discuss: The importance of Trade off,
Explanation of Solution
Trade off occurs when activities are not up to mark. Examples:
- Trade off between studying one subject over the other specific subject
- Buying a burger for 10 dollars instead of a study guide
The opportunity cost principal has a wide application in economics. It is useful in the determination of values internally and internationally. This concept is therefore used for:
- Measuring profits
- Formation of capital budget
- Policies decision of firms
Production possibility curve is mainly used for:
Unemployment - Innovation in technologies
- Economy Growth (GDP)
Introduction:
Trade off is occurs when, one thing is given up in order to get some other thing or when one thing increase and other thing must get decrease. Trade off can also be expressed in terms of ‘opportunity cost’.
Opportunity cost is the cost of availing one opportunity in the terms of the loss of other opportunity or it is value of factor in its next best alternative use.
Production possibilities curve are the graphical representation of all the
Chapter 1 Solutions
Economics Today and Tomorrow, Student Edition
Additional Business Textbook Solutions
Horngren's Accounting (11th Edition)
Managerial Accounting (5th Edition)
Horngren's Accounting (12th Edition)
Cost Accounting (15th Edition)
Financial Accounting (12th Edition) (What's New in Accounting)
Principles of Accounting Volume 2
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