ch 22

Question 1

opportunity cost

Answer 1

when choosing between different alternatives, the opportunity cost is the benefit lost from the next best alternative to the one that has been chosen

Question 2

chooses

Answer 2

in a business deciding between alternatives use of resource

Question 3

non monetary

Answer 3

non-money
esteem needs

Question 4

What is the definition of a trade-off?

Answer 4

in business, where a decision-maker faces a compromise between two different alternatives,
for example, between paying dividend to shareholders and re-investing profits in the business

Question 5

benefits of running a business (being a enter)

Answer 5

1-independence
2-flexibility
3-chance to make money
4-job satisfaction
5-chance of being rich

Question 6

challenges(trade offs of running a business)

Answer 6

-Owners of small businesses are responsible for all day-to-day operations, have to available whenever the business is open
-the demand of running a business may result in a lack of free time
-business owners need a variety of skills to be successful
-sole trader so unlimited liability

Question 7

examples of trade-offs

Answer 7

holding liquid assets and investing in more productive assets

paying dividends or reinvesting in the business

ethical(costly) o more profit

Question 8

how to make the right decision

Answer 8

1-obtain info
2-balance short term with long-term
3-measure support