Billie Jean has $120 to spend and wants to buy either a new amplifier for her guitar or a new mp3 player to listen to music while working out.Both the amplifier and the mp3 player cost $120,so she can only buy one.This illustrates the basic concept that
A)trade can make everyone better off.
B)people face trade-offs.
C)rational people think at the margin.
D)decisions made at the margin are not particularly important.

Question

Quizplus · Accepted Answer

This scenario highlights the concept of trade-offs, where Billie Jean has to choose between buying an amplifier or an mp3 player as she cannot afford both. She has to weigh the benefits and costs of each option and make a decision based on her preference and priorities. This decision-making process is a trade-off as she sacrifices the benefits of one option to gain the benefits of the other.

Billie Jean Has $120 to Spend and Wants to Buy