from choices to opportunity costs
DESCRIPTION
From Choices to Opportunity Costs. opportunity costs – the most valued alternative you give up to do something what you would have chosen instead. Would you rather have the Phantom OR Would you rather have……. A housein Vista $300,000 Honda Accord MSRP of $25,000 Gas allowance of $3,000 - PowerPoint PPT PresentationTRANSCRIPT
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…