Social Studies - 2018-19

3.10 - Economic Choice and Opportunity Cost

The student will identify examples of making an economic choice and will explain the idea of opportunity cost (what is given up when making a choice).

Adopted: 2015

BIG IDEAS

  • So that  when someone gives up going to see a movie to study for a test in order to get a good grade, the opportunity cost is the cost of the movie and the enjoyment of seeing it
  • So that when at the ice cream parlor, you have to choose between rocky road and strawberry. When you choose rocky road, the opportunity cost is the enjoyment of the strawberry
  • So that if Tony buys a pizza and with that same amount of money he could have bought a drink and a hot dog, the opportunity cost is the drink and hot dog

UNDERSTANDING THE STANDARD

People make choices because they cannot have everything they want.

All choices require giving up something else (opportunity cost).


ESSENTIALS

Terms to know

  • economic choice: The choice that is made among alternatives or possibilities
  • opportunity cost: The next best choice that is given up when an economic choice is made

Economic decision making requires comparing the opportunity and monetary costs of various choices with the benefits of those choices.

Economic choices

Choices    Choices Made  

          Choice Given Up
          (Opportunity Cost)

Ice Cream or popcornIce Cream  Popcorn
Toy or favorite videoFavorite videoToy
Spend now or save for the futureSpend now    Save for the future


KEY VOCABULARY

Updated: May 29, 2018