1. Warm Up (YOU WILL TURN THIS IN!)
How are scarcity, shortage, choice, factors of production, and trade-offs connected?

2. Tuesday, September 1, 2015
Objective: Students will be able to explain the concept of opportunity costs.
Purpose: Opportunity cost is one of the things we need to consider before making economic decisions.

3. Trade Offs
Trade-offs: alternatives that we sacrifice when we make a decision
Each decision we make involves trade-offs
The decisions that businesspeople make about how to use land, labor, and capital resources also create trade-offs

4. Trade-Offs Society and Trade-offs:
Countries also make decisions that involve trade-offs. Economists simplify their explanations of the trade-offs countries face by using the example of guns and butter.
In short, the more butter that a country produces, the fewer guns that the country can produce.
This also works vice-versa.

5. Opportunity Cost
Usually one alternative is more desirable for a country/business/individual than another.
The MOST DESIRABLE alternative given up as the result of a decision is called the Opportunity Cost.

6. Opportunity Cost If I gave you a choice between these four candy bars…
A B C D
Which one would you choose?
Which one (s) would be your opportunity costs?