1. And Trade-offs

2.  0422.9.7Identify the opportunity costs and trade-offs involved in making choices.  0422.9.12 Analyze the relationship of price to scarcity.  0422.9.13 Describe how prices affect buying and selling decisions.

3.  Prepare a graphic organizer similar to the example that will be shown.  The organizer will list the economic term  The definition of the economic term  An example from the lecture of the economic term  An example of your own that shows understanding of the economic term

4. Scarcity Definition Example from Lecture Your own Example Trade-off Definition Example from Lecture Your own Example Opportunity Cost Definition Example from Lecture Your own Example

5.  The difference between what consumers want and need and what resources are available.  Scarcity is the concept that there is only so much of anything.

6.  There is only so many miles of beach front property.  This limits the number of homes that can be build or resorts that can be build “on the beach”’  Everyone likes gold jewelry.  There is only so much gold available.

7.  Scarcity necessitates trade-offs.  Trade-off usually refers to losing one quality or aspect of something in return for gaining another quality or aspect. It implies a decision to be made with full comprehension or understanding of both the upside and downside of a particular choice.

8.  A trade-off involves a sacrifice that must be made to obtain a certain product, rather than other products that can be made using the same required resources.  When choices are made (collectively or by an individual) to accept having less of one thing in order to get more of something else, the choices/results are called trade-offs.

9.  A student faced with the choice of spending Saturday studying for an exam or shopping at The Mall makes a trade-off of shopping time for study time in deciding how many hours to study and how many to spend shopping.

10.  Society also makes trade-offs, for example, between its need for a more plentiful supply of energy and its need to prevent (air pollution) excessive deterioration of the environment caused by energy production technologies.

11.  Opportunity cost -- the highest valued alternative that must be sacrificed to attain something or otherwise satisfy a want.  Opportunity cost is the loss of potential gain from the best alternative to any choice.

12.  Opportunity cost is the cost of pursuing one choice instead of another.  Every action has an opportunity cost.

13.  The opportunity cost of a spur-of-the- moment decision to go to the movies Tuesday afternoon instead of going in to work is not just the six dollars for the ticket plus the gasoline and wear and tear on the car to get there.

14.  It also includes (at least) the four hours' wages not earned, diminished prospects for being promoted at work, and possibly such additional consequences as future hostility from co-workers who had to take up the slack, unpleasant feelings of guilt or shame, and so on.

15.  Someone who invests $10,000 in a stock denies oneself the interest that one can easily earn by leaving the $10,000 dollars in a bank account instead.stockinterestbank account

16.  Opportunity cost is not restricted to monetary or financial costs: lost time, pleasure or any other benefit that provides utility should also be considered.utility  Any decision that involves a choice between two or more options has an opportunity cost

17.  How does scarcity affect price?  If beach front property is scarce, how does that affect the price of beach front property?  If gold is scarce, how does that affect the price of gold?  If gasoline is scarce, how does that affect the price of gas?

18.  How does price affect the decision to buy property?  How does price affect the decision to buy jewelry?  How does price affect the decision to buy gas?