What is the classic example of a trade off?

What is the classic example of a trade off?

A classic example is the trade-off between speed and stamina among species of animals (e.g., cats versus dogs) and among Olympic athletes (e.g., the best sprinters are not the best marathoners).

What is a trade off you face in your daily life?

1) after opening the eye at first and of deciding that this world is our rival or a friend. 2) choosing the streams English or commerce or Science. 3) death as the trade off that we have to face in our life.

Is opportunity cost good or bad?

Incurring opportunity costs is not inherently bad, as they do not detract from business decisions; instead, opportunity costs often enhance the decision-making process. Businesses engage in this type of decision-making to ensure the benefits of their decision are always greater than the cost of an alternative.

What is opportunity cost in decision making?

“Opportunity cost is the cost of a foregone alternative. If you chose one alternative over another, then the cost of choosing that alternative is an opportunity cost. Opportunity cost is the benefits you lose by choosing one alternative over another one.”

What is marginal costing in simple words?

Marginal cost refers to the increase or decrease in the cost of producing one more unit or serving one more customer. It is often calculated when enough items have been produced to cover the fixed costs and production is at a break-even point, where the only expenses going forward are variable or direct costs.

What is marginal cost accounting?

Marginal costs are the costs associated with producing an additional unit of output. It is calculated as the change in total production costs divided by the change in the number of units produced. Marginal costs exist when the total cost of production includes variable costs.

What are the 3 basic trade-offs faced by a society?

Society faces three key trade-offs: what goods and services to produce, how to produce them, and who gets the goods and services.

What is a factory building an example of?

A factory building is an example of physical capital.

Why is opportunity cost important to firms?

Opportunity cost means real cost and it is different from money cost. (iii) Importance of opportunity cost to the firms: It helps the firms or industry in making decision on which resources to use in production and the method of production to be used, i.e. capital intensive or labour intensive.

What is the difference between marginal cost and opportunity cost?

Marginal cost always has a monetary value while opportunity cost can have a monetary value or not. Marginal cost is the cost incurred during the production of a unit or item while opportunity cost is the cost incurred during the consumer’s choice of which product to buy or use.

What is PPC explain with diagram?

The production possibilities curve (PPC) is a graph that shows all of the different combinations of output that can be produced given current resources and technology. Sometimes called the production possibilities frontier (PPF), the PPC illustrates scarcity and tradeoffs.

What is the role of opportunity cost?

Opportunity Cost helps a manufacturer to determine whether to produce or not. He can assess the economic benefit of going for a production activity by comparing it with the option of not producing at all. He may invest the same amount of money, time, and resources in another business or Opportunity.

What is the opportunity cost of a particular product?

— In the words of Left witch, “Opportunity cost of a particular product is the value of the foregone alternative products that resources used in its production, could have produced.” Opportunity cost is not what you choose when you make a choice —it is what you did not choose in making a choice.