opportunity costs – the most valued alternative you give up to do something what you would have chosen instead

Would you rather have the PhantomOR

Would you rather have……. A house in Vista $300,000 Honda Accord MSRP of $25,000 Gas allowance of $3,000 Monthly allowance for shopping of $1,000

for 1 year

OR Would you rather have…….

A $340,000 trip around the world for a year

The cost of passing up the next best choice when making a decision. opportunity cost. InvestorWords.com. Retrieved July 21, 2008, from InvestorWords.com website:

http://www.investorwords.com/3470/opportunity_cost.html

Every choice we make has an opportunity cost.

The most valued opportunity or alternative you give up for your 1st choice is the opportunity cost.

1 phantom 2 house in Vista, Honda, shopping, gas 3 trip around the world

Opportunity cost is all about choices.

When you forgo doing homework to get on Facebook, your opportunity cost for getting on Facebook was your homework.

Your choice. Your opportunity cost.

Increase the Opportunity Cost-Do Less of It

Decision

Eat at Jack-In-The-Box

Opportunity Cost

Eat at Mc Donald’s High Opportunity

Cost▪ MacDonald’s reduces

prices▪ More choices added at

Mickey D’s▪ Certified Cleanest Fast

Food Restaurant in SD County

I’m hungry. What should I do?

Decrease the Opportunity Cost-Do More of It

Decision

Eat at Jack-In-The-Box

Opportunity Cost

Eat at McDonald’s Low Opportunity

Cost▪ McDonald’s raises

prices▪ Only serves

strawberry shakes▪ E. Coli outbreak

I’m hungry. What should I do?

2 More Important Consequences of ScarcityBecause there is scarcity, there must

be some way of deciding “who gets what”

Rationing Device

Because there is scarcity, there is competition

Rationing Device

Rationing Device

HOMEWORKReview Chapter 1.1 (p.6-13)as needed to complete the following:

1. At the end of your class notes, answer questions 4-6 Section Review p. 13

2. Read p. 12 “Would People Go To College If Scarcity Did Not Exist?” and write an answer to the question on that page.

3. Create a comic strip showing the relationship of scarcity, choice and opportunity cost

Using the Diagrams and flow charts in Ch. 1 (pg 10), create a comic strip displaying the following underlined concepts studied in class: Wants Resources displaying Scarcity which creates choices which leaves

an opportunity cost

Each Term will have a frame in the comic.

Choose a topic from your life

Demonstrate your understanding of the flow/connections

Use Voice Bubbles for each frame

Be creative! Stick people rule! Must all be

original work. Highlight the

terms in your VoiceBubbles

ECONOMICS is:

The science that studies the choices of people trying to satisfy their wants and needs in a world of scarcity…