Suppose you are deciding whether to spend your tax rebate check on a new iPod player or a new digital camera. You are dealing with the concept of
A) equity.
B) comparative advantage.
C) opportunity costs.
D) the fallacy of composition.

Question

Quizplus · Accepted Answer

The concept being dealt with is opportunity costs, which refers to the cost of choosing one option over another. In this case, choosing to spend the tax rebate check on an iPod player means giving up the opportunity to spend it on a digital camera and vice versa. Therefore, in order to make the best choice, one must consider the opportunity cost of each option and weigh the benefits and drawbacks of each. It ultimately depends on individual preferences and needs.

Suppose You Are Deciding Whether to Spend Your Tax Rebate