Which term describes the choices that people must make to meet their wants and needs?
(1 point)
O supply
• demand
O opportunity cost
O producers
The term that describes the choices that people must make to meet their wants and needs is "opportunity cost".
The term that describes the choices that people must make to meet their wants and needs is "opportunity cost."
The term that describes the choices people must make to meet their wants and needs is opportunity cost. To understand this concept, we need to define a few key terms:
1. Supply: In economics, supply refers to the quantity of goods and services that producers are willing and able to offer for sale in the market.
2. Demand: Demand, on the other hand, represents the quantity of goods and services that consumers are willing and able to buy at a given price.
3. Producers: Producers are individuals or organizations involved in the production of goods and services. They are responsible for supplying products to the market.
Now, let's focus on opportunity cost. When individuals or households make choices about what to consume or produce, they often face trade-offs. This means that by choosing one option, they are giving up the opportunity to enjoy or produce something else. The value of the next-best alternative that is forgone or sacrificed is known as the opportunity cost.
For example, let's say you have $10 to spend, and you have to choose between buying a book or a movie ticket. If you decide to buy the book, the opportunity cost would be the enjoyment you would have gained from watching the movie. Conversely, if you choose the movie ticket, the opportunity cost would be the pleasure of reading the book.
In summary, opportunity cost refers to the trade-offs or sacrifices individuals must make when choosing between different options to meet their wants and needs.