Gwen's decision to buy a new television instead of a bicycle for the same price

Question

Quizplus · Accepted Answer

The decision to buy a new television instead of a bicycle for the same price involves a trade-off, as Gwen had to give up the opportunity to purchase the bicycle in order to purchase the television. The opportunity cost of this decision is the bicycle. Option A is incorrect because opportunity cost is present whenever a choice is made, regardless of whether the costs are the same. Option B is incorrect because putting the money in a bank CD does involve trade-offs and opportunity cost, as the money could potentially be used for other investments or purchases. Option C is also incorrect, as scarcity and opportunity cost exist regardless of an individual's wealth.

Gwen's Decision to Buy a New Television Instead of a Bicycle