1. Thursday Please get out your Key Terms (7-15)
1 definition + 1 example/ mem. dev = credit
Don’t forget!.... Lab 1 tomorrow/ no auction

2. What is a “trade off” ?????

3. Trade-off: exchanging one good for another
Think of a trade-off as “weighing the pros & cons” in decision making
A way to organize a decision’s factors

4. Examples of Trade Offs…
If you choose to buy an iPhone, you’re going to give up some of your income…
If you’re taking this class, you’re not at home sleeping….

5. What are benefits to both. That “list” is how you make your decisions…
What are benefits to both? That “list” is how you make your decisions…. & recognize trade-offs ? Example: The ‘Would You Rather’ Game! o0o0o0o0o0o

6. The cost is what you give up in order to get or do something else
The Cost of Trade-Offs
The cost is what you give up in order to get or do something else VS
Example: Time is a scarce resource…there are only so many hours per day so you prioritize (study vs. COD)

7. Opportunity cost: the value of the next best alternative that had to be given up to do the action that was chosen
You constantly make trade-offs on a daily basis
The decisions you make when it comes to time or $$ spent should be given thought
BUT even when given thought you give up using that time or $$ for other factors
What is the BIGGEST BUMMER on that list of factors?
Opportunity cost

8. Example Right Now…. I’m writing this lesson for tomorrow…. Sleeping 4
Watching Tropic Thunder 2
Working on my Etsy site 6
Making jewelry 8
Working on my sister’s wedding 9
Spending time with my bf 3
Exercising
Eating 1
Looking for shoes online 7
Reading the ‘Life of Pi’ 5
There are 10 other things I could be doing.
I’ve rated these things from 1-10.
1 = I’d rather be doing the most
10 = I’d rather be doing the least
So…
What’s my opportunity cost in writing this lesson?

9. Your Turn! FOOD FOR THOUGHT: You’re sitting in school right now.
List 10 other things/ alternative that you could be doing instead.
Rank them from 1-10…
1 = you’d rather be doing this the most
2 = you’d rather be doing this the least
Finally, circle your #1 or… your opportunity cost!
FOOD FOR THOUGHT:
*Always be aware of your priorities (ranking) in decision making & DEFINITELY your opportunity cost*

10. What are ALL of the steps involved with each of these?
Sunk Costs
sunk costs are retrospective (past) costs that have already been “spent” and cannot be recovered
Movies
Break Ups
Crappy Food Order …
What are ALL of the steps involved with each of these?

11. The Approach to Sunk Costs
You shouldn’t consider PAST decisions when making FUTURE choices, since you cannot alter what is in the past

12. More Would You Rather’s?...

13. Your Opportunity Cost:
Trade Offs
sunk costs are retrospective (___________)
costs that have already been “spent” and
_______________be recovered
1 example: ________________
Trade-off: ____________________________________
- If you choose to buy an iPod, you’re going to give up some of your __________________…
- If you’re taking this class, you’re not at home __________________….
- What are benefits to both?
* That “list” is how you make your ______________________…. & recognize trade-offs
You shouldn’t consider __________ decisions when making ___________ choices, since you cannot alter what is in the past
The Cost of Trade-Offs
- The cost is what you _____________in order to get or do something else
- _________is a scarce resource…there are only so many hours per day so you ______________
__________________________________: the value of the next best alternative that had to be given up to do the action that was chosen
You constantly make trade-offs on a ____________basis
The decision you make when it comes to time or $$ spent should be given thought
BUT even when given thought you give up using that time or $$ for __________________
You’re sitting in school right now.
List 10 other things/ alternative that you could be doing instead. Rank them from 1-10…
1 = you’d rather be doing this the most / 2 = you’d rather be doing this the least……….Finally, circle your #1 or… your opportunity cost!
FOOD FOR THOUGHT:
*Always be aware of your priorities (ranking) in decision making & DEFINITELY your opportunity cost*
[other things you could be doing – rank (1-10)] [other things you could be doing – rank (1-10)]
_____________________ _______ ______________________ ______
Your Opportunity Cost: