Question

frankie has a strict weekly budget and has only enough money this week to make one large purchase. before he saw the condition of his old basketball shoes, he was planning to purchase a new winter coat that he saved for over several weeks. now, frankie must choose if he is going to purchase the new shoes and wear his older winter coat, or vice versa. in this scenario, frankie must consider whether making one choice will force him to give up another. based on what you have read, which economic concept is frankie faced with? needs vs. wants opportunity cost risk and return goal setting

Explanation:

Opportunity cost is the value of the next - best alternative forgone when a choice is made. In this case, Frankie can only make one large purchase. If he buys the new basketball shoes, he has to give up the new winter coat (and vice versa). “Needs vs. wants” focuses on distinguishing between essential and non - essential items, but here both the coat and shoes could be needs or wants and the key is the trade - off. “Risk and return” is about the relationship between the risk of an investment and its potential return, which is not relevant here. “Goal setting” is about defining and planning to achieve goals, not about the trade - off of choices. So the economic concept Frankie is faced with is opportunity cost.

Answer:

B. opportunity cost