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Opportunity cost
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Opportunity cost

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Transcript

  • 1. Opportunity Cost Economics 1
  • 2. Learning Targets
    • I can explain how opportunity cost affects my choices.
    • I can define trade-offs, guns or butter, and marginal thinking.
  • 3. Trade-off
    • All of the alternatives that we give up whenever we choose one course of action over another.
    • Individuals vs. Businesses.
      • Pizza vs. HMWK?!
  • 4. Guns or Butter
    • Military goods vs. consumer goods.
      • Resources are limited!
  • 5. Opportunity Cost
    • The most desirable alternative given up as the result of a decision.
      • Whatever we are willing to sacrifice.
  • 6. Thinking at the Margin
    • Deciding how much more or less to do...
      • Involves adding one unit or subtracting one unit.