1.3 Opportunity cost

What is trade-off?

• Your choice

• What you give up to make a choice

• How much money you pay

• The willingness to give something away

What is scarcity?

• Having too many resources

• Not having enough resources

• Need to make a choice

What is opportunity cost?

• Your first choice

• Your final choice

• How much more money you pay

• The last you would 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 backyard. They decide to spend the money on a swimming pool. What is the opportunity cost of their decision?

• vacation

• swimming pool

• backyard

• money

Emelia has been invited to a sleepover 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

• Chloe's house

• a sleepover

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 show

• spelling test

• nothing

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

• local government

• public library

The economic problem is that

• resources are limited and wants are limited.

• resources are unlimited and wants are limited.

• resources are limited and wants are unlimited.

• resources are unlimited and wants are unlimited.

The opportunity cost of a good is

• its price in dollars and cents.

• the alternative goods forgone.

• the price of alternative goods foregone.

• none of the other options