of another?
a. trade-off
b. marginal cost
c. marginal benefit
d. measure of cost
Which of the following best describes an opportunity cost?
a. the additional cost of producing one additional unit of output
b. an individual goes to the movies and decides to buy popcorn
c. the real price of items increases as the value of money decreases
d. an individual pays for a guitar lesson instead of going to the movies
5. Which of the following is a market economy primarily based on?
a. capitalism and free enterprise
b. traditionalism and command
c. incentives and traditionalism
d. informed judgment

Opportunity cost is the value of the next best alternative forgone when making a decision. It represents what must be given up to obtain something desired. For example, if someone chooses to pay for a guitar lesson instead of going to the movies, the opportunity cost is the value of the movie experience foregone.

Trade-off occurs in decision-making when one benefit is sacrificed to gain another. It involves making choices between alternatives. In economics, trade-offs are inevitable as people face scarcity and have to make decisions on how to allocate resources.

Market economy is primarily based on capitalism and free enterprise. It involves private ownership of goods and services, with economic decisions driven by supply and demand in the market.

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