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 3-5 sentences, define opportunity cost and trade-off and then explain the opportunity cost and trade-off of Ethan's decision.

Answer 1

His opportunity cost is to give up the next best thing, in this case the digital camera. It is called a trade-off between cell phone and digital camera. But I could not imagine that it is a big one, compared to efficiency and equality.