Which of the following is a good example of a tradeoff?

• A. A government printing more money to pay off debt
• B. A company increasing production when demand rises
• C. A consumer buying a product at a discounted price
• D. A student choosing to spend an extra hour studying instead of going out with friends

Answer: (D)

Verified step by step guidance

1. Understand the concept of a tradeoff in microeconomics: a tradeoff occurs when choosing more of one thing results in having less of another due to limited resources or time.
2. Analyze each option to identify if it involves giving up one benefit to gain another:
3. For 'A government printing more money to pay off debt' - this involves potential inflation but is more about consequences than a direct choice between two alternatives.
4. For 'A company increasing production when demand rises' - this is a response to market conditions, not a choice between alternatives involving sacrifice.
5. For 'A consumer buying a product at a discounted price' - this is a purchase decision but does not explicitly show sacrificing one option for another.
6. For 'A student choosing to spend an extra hour studying instead of going out with friends' - this clearly shows a tradeoff because the student sacrifices leisure time to gain more study time, illustrating the concept perfectly.