Opportunity Costs and Trade-offs

What is an opportunity cost?

• The benefits that we miss out on by choosing one option and sacrificing another

• The benefits that we gain by choosing one option and sacrificing another

• The potential benefits of choosing one option over another

• The potential benefits of choosing both options

Which of the following is an example of an opportunity cost?

• Expanding into the USA and launching a new product in the UK

• Expanding into the USA and launching a new product in the USA

• Staying in the UK and launching a new product in the UK

• Staying in the UK and launching a new product in the USA

What is a trade-off?

• When a business sacrifices one option to achieve another

• When a business can have a little bit of both options

• When a business chooses one option and sacrifices another

• When a business experiences the full benefits of both options

Which of the following is an example of a trade-off?

• Spending the full budget on training or marketing

• Spending half the budget on training and half on marketing

• Spending the full budget on training and marketing

• Not spending the budget on either training or marketing

What can be done in a trade-off?

• Experience the full benefits of both options

• Sacrifice the benefits of one option to achieve the other

• Choose one option and sacrifice the other

• Have a little bit of both options

What is the difference between an opportunity cost and a trade-off?

• An opportunity cost sacrifices one option, while a trade-off sacrifices both options

• An opportunity cost sacrifices both options, while a trade-off sacrifices one option

• An opportunity cost experiences the full benefits of both options, while a trade-off sacrifices both options

• An opportunity cost sacrifices the benefits of one option, while a trade-off experiences the full benefits of both options

What are the benefits of launching a new product in the UK?

• Strengthening the brand name, extending the product life cycle, bringing in revenue, increasing market share

• Expanding into the USA, launching a new product in the UK

• Becoming a PLC, launching a new product in the UK

• Training employees, advertising the business

What are the benefits of being an LTD?

• Choosing who buys shares in the business, having a smaller number of shareholders

• Expanding into the USA, launching a new product in the UK

• Becoming a PLC, launching a new product in the UK

• Training employees, advertising the business

How can a business use its profits?

• Retain all profits, distribute all profits to shareholders

• Retain some profits, distribute some profits to shareholders

• Retain all profits, distribute some profits to shareholders

• Retain some profits, distribute all profits to shareholders

What is the maximum number of correct options in a question?

• 0

• 1

• 2

• 3