4. Every economic decision involves trade-offs, which come with both costs and
benefits. The benefits lost when making an economic decision are known as the
opportunity cost of that decision.
Imagine this scenario. Ivan is an expert coder, and he's designing his own video
game. He has a very clear vision for what he wants. But it's taking a long time to
complete. He toils day and night in his cramped, messy apartment. He really wants a
separate workspace, and he has the budget to rent a small office. But he decides
instead to use that money to hire a novice coder to help him finish the project.
First, what trade-offs did Ivan have to make when he decided to hire help? Second,
what was the opportunity cost? (4 points)
|