Briefly describe the trade-offs involved in the following decision. Specifically

Question

Briefly describe the trade-offs involved in the following decision. Specifically, what are the opportunity costs

associated with the decision? Pay particular attention to the trade-offs between present and future consumption.

Frank is overweight and decides to work out every day and to go on a diet.Frank is overweight and decides to work out every day and to go on a diet.

A.His opportunity cost is the alternative uses of time spent exercising.His opportunity cost is the alternative uses of time spent exercising.

B.His opportunity cost is the forgone satisfaction of consuming foods that are not part of his diet plan.His opportunity cost is the forgone satisfaction of consuming foods that are not part of his diet plan.

C.Assuming exercise is not leisure comma he trades consumption of current leisure for future health.Assuming exercise is not leisure, he trades consumption of current leisure for future health.

D.All of the above.

Explanation / Answer

Correct Answer:
D

Opportunity cost means the benefits of another activity foregone if one activity is performed and its benefits are availed. In the given case also, benefits and enjoyment foregone today that could come from exotic food, is foregone to avail the future benefits of good health and proper weight. So, present benefits are foregone to avail the future bigger benefits.On a similar note, time used in exercise can be used for other activities and it can also be considered as opportunity cost.

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