Opportunity Cost

What is opportunity cost?

• your choice
• what you give up to make a choice

A popular bakery has only a few ingredients left to make their products.  They could bake muffins or cookies, but they can’t make both.  The bakers decide to make cookies for their customers.  What is the opportunity cost of their decision?

• muffins 
• cookies 

The Welch family has saved some money.  They can spend it on a vacation to the Grand Canyon or build a swimming pool in their back yard.  They decide to spend the money on a swimming pool.  What is the opportunity cost of their decision?

• vacation 
• swimming pool 

Emelia has been invited to a sleep over at Chloe’s house for this Saturday.  Emelia has tickets to see her favorite band in concert that same night.  She decides to give the tickets to her sister and go to Chloe’s house.  What is the opportunity cost of her decision?

• seeing her favorite band 
• spending time at a friends house 

Max is studying for his spelling test.  Unfortunately, his favorite TV program is on right now.  If he studies for the test, he will miss watching the show.  Max decides to study for his test instead of watching TV.  What is the opportunity cost of his decision?

• studying for a test
• watching TV 

The local government for a community must decide what to do with the sales tax collected.  They could build a new skate park or they could buy more computers for the public library.  The officials decide to build a skate park.  What is the opportunity cost of their decision?

• new skate park
• more computers 

Which one of these definitions best describe Opportunity Costs?

• The cost of making one decision over another.

• The cost for the opportunity to buy anything you want.

• The opportunity that will cost you loads of money.

Alex is studying for his math quiz, but his favorite TV show just started. If he studies for the quiz, he will miss out on watching the show. Alex decides not to watch the show and continue studying for the quiz. What is the opportunity cost of his decision?

• studying for a quiz

• watching TV

• eating dinner

• taking a nap

Which of these is NOT an example of a need?

• Water

• Food

• Cell phone

• Shelter

Amber was shopping at the mall. She had $80 to spend. She found three items she liked: $75 for a pair of shoes, $70 for a jacket, and $62 for a dress. After shopping for a couple hours, she decided to borrow a pair of shoes from her cousin and to buy the jacket for $70. What was her opportunity cost?

• Shoes

• Jacket

• Dress

• Purse