Opportunity Cost

These are the things we desire to have.

• Wants

• Goals

• Opportunity Costs

Because of scarcity, people are forced to make _________ about how to use resources.

• Choices

• Opportunities

• Houses

• Desires

In economics a decision is free if:

• There is no money involved.

• There are no products involved.

• There is no exchange with another person.

• A decision is never free. There is usually an alternative which results in an opportunity cost. Not free.

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

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

Tom was shopping for a car. He has looked at a Ford, Honda, Toyota, and Dodge. After a lot of debate, he narrowed it down to either the Ford or the Honda. He selected the Ford, because he liked the interior a little better. What was his opportunity cost?

• Ford

• Honda

• Toyota

• Dodge

What is it called if we ran out of coffee creamer?

• Scarcity

• Opportunity Cost

• Producer

• Services

Limited Resources + Unlimited Wants =

• Scarcity

• Productivity

• Opportunity Cost

• Efficiency

A trade-off is

• a purchase in a marketplace.

• an alternative that we sacrifice when we make a decision.

• any good or service a consumer needs.

• a factor of production.

Which of the following best describes the relationship between trade offs and opportunity cost?

• opportunity costs happen because of trade offs
• opportunity costs are the opposite of trade offs
• trade offs lower the opportunity cost of an economic decision
• trade offs occur when there are no opportunity costs