Key Terms
You are in a clothing store and like a pair of pants and a T-shirt. You only have enough money for one item of clothing. You decide to buy the pants. The opportunity cost is ________.
What is the value of the pants.
When considering economics, consequences can only be a negative thing that happens.
What is False?
What is answers may vary?
Give an example of an implicit cost.
What is answers may vary.
Costs that require a money payment.
What is Explicit Cost?
The opportunity cost of any action is
A) all the possible alternatives forgone
B) the best alternative forgone
C) the time required but not the monetary cost
D) the monetary cost but not the time required.
What is B) the best alternative forgone?
You have tickets to the 49ers game on Sunday and you have an invitation to a friend’s party. You cannot go to both. You choose to go to the game. The opportunity cost of your decision is losing out on your tickets
What is False?
You have 2 hours of free time. You can either study for an upcoming Econ test or play GeoGuessr.
What is the opportunity cost of choosing to play GeoGuessr?
Studying for the Econ test and passing the test
What would be the consequences of always being 20 minutes early instead of always being 10 minutes late?
What are answers may vary?
When there is a limited amount of a given resource.
What is Scarcity?
In 2009, Governor O’Malley proposed that several billion dollars be made available to create a new YMCA in Maryland. Other options that the money could have been spent on include, a juvenile detention center, a new public library, and a local Target. The opportunity cost of spending money on one of the other options is _________.
No new YMCA
True or false. Opportunity cost is not a personal thing.
False.
The Maryland General Assembly has $1 million to spend in designing the upcoming budget. State legislators decide to spend most of that money on new curriculum to be used in schools, rather than restoring vacant homes. The opportunity cost of this decision is __________.
What is restoring vacant homes?
If I spend too much money on ________, I might not be able to _______.
What is answers may vary.
Costs that do not require a money payment.
What is Implicit Cost?
You decide to attend college after high school. List 2 or more the opportunity costs of going to college.
Answers may vary.
Sam could either go home for Spring break or go to Mexico. The trip home costs $100, the trip to Mexico costs $1200. The opportunity cost of going to Mexico is _______.
What is saving $1100?
What is going home?
Give 2 examples of explicit costs.
What is answers may vary?
This inncludes both explicit and implicit costs.
What is Opportunity Cost?
Jay has $400.00 to spend at the mall. He needs to decide whether to buy three pair of sneakers or 5 outfits. If he chooses to save the money, the opportunity cost of his decision is __________.
What is three pair of sneakers or 5 outfits?
You decide to play baseball this spring instead of working at a part time job in a computer store. The opportunity costs of your decision is money made from working.
What is True?
You won a free ticket to see a One Direction concert (which has no resale value). Taylor Swift is performing on the same night and is your next-best alternative activity. Tickets to see Taylor Swift cost $500. You would be willing to pay up to $500 to see Taylor Swift. Based on this information, the opportunity cost of seeing One Direction is _________.
What is missing out on a concert you want to see?
Term used to describe when wants and needs are limited.
scarcity
decision-making modeling
economics
cost-benefit analysis
What is 1. Scarcity?