Chapter 1, Section 2: Opportunity Cost.
Describe why every decision involves trade-offs.
Explain the concept of opportunity cost.
Explain how people make decisions by thinking at the margin.
PA.6.3.12B Evaluate the economic reasoning behind a choice.
PA5.3.12.C Evaluate the allocation of resources used to produce goods and services
1. Present three examples that illustrate how all decisions involve trade-offs.
2. Why must opportunity cost of a decision always be something desirable?
3. How do economists use the phrase “guns or butter”?
4. What does it mean to “think at the margin”?
5. Use the concept of opportunity cost to explain why both people and nations
specialize and trade.
6. True, False or uncertain and why? “Garbage is a scarce economic good because it