When the cost of a taxi ride rose, Martina started packing a lunch instead of going to a restaurant. Which economic principle does this demonstrate?

Respuesta :

According to Gregory Mankiw, a US teacher and economist, this example would demonstrate the economic principle of "the significance of opportunity cost in decision making". Martina had to give up going to restaurants in order to continue travelling by taxi. She probably compared the cost and benefits of packing lunch vs going to a restaurant before taking the final decision.

The economic principle that is demonstrated when Martina started packing a lunch instead of going to a restaurant is concept of Opportunity.

What is concept of Opportunity

The concept of Opportunity Cost  can be regarded as a concept that help in making decisions when choosing the best possible option among all the available options.

It help in utilization of  every possible resource tactfully, efficiently.

Learn more about concept of Opportunity at;

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