Question

ethan received a gift card and was considering three options: digital camera, cell phone, and video games. after carefully thinking about it, ethan narrowed his decision down to the digital camera and the cell phone. finally, ethan chose the cell phone. in three to five sentences, define opportunity cost and trade - off and then explain the opportunity cost and trade - off of ethans decision.

Explanation:

Opportunity cost is the value of the next - best alternative forgone. A trade - off is sacrificing one thing for another. Ethan chose the cell phone, so his opportunity cost is the digital camera he didn't pick. The trade - off is giving up the features and benefits of the digital camera to get the cell phone.

Answer:

Opportunity cost is the value of the next - best alternative not chosen. A trade - off is making a sacrifice to gain something else. Ethan's opportunity cost is the digital camera he didn't select. The trade - off is sacrificing the digital camera for the cell phone.