Choices entail marginal costs because resources are scarce.

Question

Quizplus · Accepted Answer

When making choices, we usually have to give up something else, i.e., there is a cost associated with every choice. This is known as the opportunity cost, and it is what we lose as a result of choosing one option over others. Since resources are finite or scarce, we cannot have everything we want, and we have to make trade-offs. These trade-offs involve choosing one option over another, and the cost of the foregone alternative is what we call marginal cost. Therefore, choices entail marginal costs because resources are scarce.

Choices Entail Marginal Costs Because Resources Are Scarce