Because resources are scarce a person is forced to make many
decisions throughout their life. Whenever
a person makes a decision they are choosing one action instead of other
alternatives. For example, after school
you can play video games, study, watch television or go to sleep. Even when YOU are completely UNAWARE of it, you
are constantly making decisions and there is both an opportunity cost and opportunity benefit of each
decision.
Cost/Benefit Analysis Examples:
1)
You are in a
clothing store and like a pair of pants and a T-shirt. You only have enough money for one
item of clothing. You decide to buy the pants. What
is the opportunity cost?
2)
You decide to play baseball this spring
instead of working at a part time job in a computer store. List several of the opportunity costs
of choosing to play baseball instead of working.
3)
You have
tickets to the 49ers game on Sunday and you have an invitation to a
friend’s party. You cannot go to
both. You choose to go to the
party. What
is the opportunity cost? What is the risk in your
decision?
4)
You decide to attend
college next fall. List 3 or more
the opportunity costs and 3 or more opportunity benefits of attending college
next fall.
Opportunity Benefit Opportunity Cost
1.
____________________ 1.
_________________
2.
___________________ 2.
__________________
3. ___________________ 3. __________________
4. ___________________ 4. __________________
5. ___________________ 5. __________________
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