John is an athlete.He has $120 to spend and wants to buy either a heart rate monitor or new running shoes.Both the heart rate monitor and running shoes cost $120,so he can only buy one.This illustrates the principle that
A)trade can make everyone better off.
B)people face trade-offs.
C)rational people think at the margin.
D)people respond to incentives.

Question

Quizplus · Accepted Answer

The scenario describes a trade-off between buying a heart rate monitor or running shoes, as John only has $120 to spend and cannot afford both. This illustrates the principle of people facing trade-offs, which is the idea that when people make choices, they must give up something else in return. In this case, John must give up the opportunity to purchase one item in order to buy the other. While trade can make everyone better off and rational people think at the margin, these principles are not directly applicable to this scenario. People responding to incentives may be relevant if John's decision is influenced by external factors, such as a sale or discount, but this is not mentioned in the scenario.

John Is an Athlete