1. Scarcity, opportunity cost, and marginal analysis

Larry is training for a triathlon, a timed race that combines swimming, biking, and running.

Consider the following sentence: Larry has only 20 hours this week that he can devote to training. Each hour he spends swimming is an hour that he can't spend biking or running.

Which basic principle of individual choice do these statements best illustrate?

Larry can use time most efficiently by spending the same amounts of time on swimming, biking, and running.

People face trade-offs.

Larry has an incentive to spend more time on swimming than on biking or running.

People usually exploit opportunities to make themselves better off.