Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Opportunity cost


Published on

Published in: Education
  • Be the first to comment

  • Be the first to like this

Opportunity cost

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