Which statement is TRUE, according to standard economic theory?
A)Resources are scarce when they can satisfy everyone's wants.
B)The true cost of a choice is what you must give up when choosing between alternatives.
C)People typically do not make choices that will make them better off.
D)Rational people use trade-off analysis when making "how much" decisions.

Question

Quizplus · Accepted Answer

According to standard economic theory, the true cost of a choice is what you must give up when choosing between alternatives. This is known as opportunity cost. Resources are considered scarce because our wants and needs are unlimited while the resources to fulfill them are limited. People are generally rational and make choices that they believe will make them better off. Rational decision-making involves trade-off analysis, weighing the benefits and costs of each option. Therefore, statement B is the only one that is true according to standard economic theory.

Which Statement Is TRUE, According to Standard Economic Theory