Choices and 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 Gomez 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

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

• seeing her favorite band

• spending time at a friends house

Jose is studying for his math test. Unfortunately, his favorite TV program is on right now. If he studies for the test, he will miss watching the show. Jose 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 

_______ is the cost associated with giving up one thing for another.

• opportunity cost

• rationing

• reallocation

• alternative

Who determines your opportunity cost?

• Your parents

• You

• Your friends

• Your teachers

You go to Target and pick 2 shirts. You only have enough money for 1 of them. One of them is on sale and the other is full price. You pick the one on sale. What is your choice?

• the money

• the full price shirt

• the on sale shirt

• Target

True or False: All choices require giving up something else.

• true

• false