Opportunity Costs and Decision-Making

Mr. Stevens introduces the concepts of trade-offs and opportunity costs, explaining how scarcity forces us to make decisions about resource allocation. He uses the example of attending school to illustrate how individuals make choices based on available information and potential outcomes. Students are asked to list alternative activities to attending school, identifying these as trade-offs, and to determine their opportunity cost, which is the next best alternative they forgo. The video concludes with a brief mention of the next topic: production possibilities.

What is the main reason we need to make decisions about resource allocation?

• Because wants and needs are limited

• Because resources are unlimited

• Because resources are limited

• Because decisions have no cost

Which of the following is NOT a factor influencing the decision to attend school?

• Parental pressure

• Unlimited resources

• Desire for good grades

• Fear of negative consequences

What are trade-offs in the context of decision-making?

• The best option available

• The time spent on a decision

• The options you give up when making a decision

• The resources you gain

Which of the following is an example of a trade-off?

• Being eligible for sports

• Getting a scholarship

• Sleeping instead of studying

• Attending school

How many opportunity costs can you have for a decision?

• One

• Unlimited

• Two

• Three

What is the opportunity cost in decision-making?

• The total cost of all options

• The next best alternative given up

• The most expensive option

• The least preferred option

If watching Netflix is your next best option after attending school, what is it considered?

• A trade-off

• A necessity

• An opportunity cost

• A resource

What should you do to identify your opportunity cost from a list of trade-offs?

• Highlight the next best option

• Choose the least preferred option

• Select the most expensive option

• Pick the first option on the list

Why is it important to understand opportunity costs?

• To increase resources

• To eliminate scarcity

• To make better decisions

• To avoid all trade-offs

What will the next video topic be about?

• Decision-making

• Scarcity

• Production possibilities

• Trade-offs