Understanding Trade-Offs and Opportunity Cost
In life, we constantly make choices that involve trade-offs. This means that we have to give up something in order to gain something else. For example, choosing to spend money on a
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About Understanding Trade-Offs and Opportunity Cost
PowerPoint presentation about 'Understanding Trade-Offs and Opportunity Cost'. This presentation describes the topic on In life, we constantly make choices that involve trade-offs. This means that we have to give up something in order to gain something else. For example, choosing to spend money on a. The key topics included in this slideshow are . Download this presentation absolutely free.
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Slide1Trade offs and Opportunity Cost Trade offs and Opportunity Cost
Slide2Trade Offs Trade Offs Trade Offs are “either/or” choices which a person makes. There are choices made every day which involve trade offs. Doing one thing means you give up doing something else. http://www.youtube.com/watch?v=7geyX 1Er1zs
Slide3Trade offs lead to “costs” Trade offs lead to “costs” When you make a trade off, you give up something to get something else. The next most desirable choice that you gave up is called the “opportunity cost”.
Slide4Learning Targets for Chapter 1: Learning Targets for Chapter 1: 1. I can understand the concept of scarcity and its role in decision- making. 2. I can identify and give real life examples of the factors of production. 3. I can list and explain tradeoffs and identify opportunity cost in personal decisions in order to make informed choices.
Slide5Note-Learning target #3 is… Note-Learning target #3 is… 3. I can list and explain tradeoffs and identify opportunity cost in personal decisions in order to make informed choices. Can you do this?
Slide6Identifying Trade Offs Identifying Trade Offs Write down 3 examples of trade offs from your own life.] What was the “opportunity cost” of each? Write down 3 examples of trade offs from current events. What was the opportunity cost of each?
Slide7Marginal Cost/Marginal Benefit Marginal Cost/Marginal Benefit Marginal Cost is the additional cost of using one more unit of a good or service. Marginal Benefit is the additional satisfaction gained by using one more unit of a good or service.
Slide8Marginal Cost/Marginal Benefit Marginal Cost/Marginal Benefit Example: Fred decided to study one extra hour for his test the next day. This cost him time watching his favorite zombie movie. Fred scored a 93% on his test, up from an 79% on the previous test.
Slide9Cost Benefit Analysis Cost Benefit Analysis Weighing the costs against the benefits. Basically- “Is it worth it?” Using “marginal analysis” you can be more precise- weigh the extra cost against the extra benefit.
