Understanding Opportunity Cost and Needs

What is the primary characteristic of a "need" in financial literacy?

• Something you desire but can live without.

• Something that is a necessity for survival.

• Something that is expensive to acquire.

Which of the following is considered a "want" rather than a "need"?

• Food

• Shelter

• Video games

What does the term "opportunity cost" refer to?

• The total amount of money spent on an item.

• The cost of missing out on the next best alternative when making a choice.

• The amount of money saved by not buying something.

Frankie has $65 and wants to buy rollerblades on sale for $65, but she also wants to go to the movies with friends for $20 on the same day. If Frankie chooses to go to the movies, what is her opportunity cost?

• The rollerblades at their sale price of $65.

• The original price of the rollerblades, $85.