1. Standard SSEF1 a. Define scarcity as a basic condition.
d. Define opportunity cost as the next best alternative

2. Scarcity
The condition of not being able to have all the goods and services one wants
Because resources are limited , people must choose some things and give up others

3. What makes something Scarce?
Scarcity
Must be desirable
Must be limited
In order for an item to be desirable it must have Utility(useful).

4. Paradox of value
Paradox of Value: A situation where a some necessities are worth less than non-necessities
Value: refers to worth in dollars and cents

5. Opportunity Cost
The opportunity cost of a choice is the value of the next best alternative given up.
The choices people make have both present and future consequences.

6. Trade-Off
Giving up some of one thing to get more of another

7. T-Chart Activity
Step 1- Think of 5 School Appropriate things you would do with an hour of free time. Write them down.
Step 2 – Rank them from 1-5 One being your first Choice Five being your last
Step 3- Put them in a T-Chart like this
Choice
Term

8. Marginal Cost v. Marginal Benefit
People make decisions based on costs and benefits.
The benefits must always outweigh the costs.
When rational decisions occur, marginal benefit outweighs marginal cost. ******

9. Cost- Benefit Analysis
Step 1- Decide what your alternatives are
Step 2- List all marginal costs and benefits in a decision making grid
Step 3- Decide which alternative benefits you most

10. Cost-Benefit Analysis
Alternatives
Costs – The cons or negative consequences
Benefits- The pros or positive outcomes of your decision.

11. Activity- In notes
Step 1- Write down three school appropriate places you go on a trip too. It can be anywhere in the world.
Step 2- List any costs and benefits associated with each
Step 3- Use my example, and put your decision into a cost benefit analysis chart of your own

12. Dance Choices
Group Choice
Band/DJ
Place
Food
Project
1st
2nd
3rd
4th

13. Answer questions in your groups.
1. What tradeoffs did your group make?
2. What was opportunity cost of each of your group’s decisions?
3. How did group preferences influence decisions?
4. In what ways is this problem similar to the “economizing behavior” faced by your family, and in what ways is it different?