Play Dough Economics Cornell Cougar Company Lesson Tuchek

Opportunity Cost: Part I - Consumers The Best Alternative Not Chosen When individuals produce goods or services, they normally trade (exchange) most of them to obtain other more desired goods or services. In doing so, individuals are immediately confronted with the problem of scarcity. As consumers they have many different goods or services to choose from, but limited income available to obtain the goods & services.

Opportunity Cost Scarcity dictates that consumers must choose which goods & services they wish to purchase. When consumers purchase one good or service, they are giving up the chance to purchase another. The best single alternative not chosen is their opportunity cost. Since a consumer choice always involves alternatives, every consumer choice has an opportunity cost.

Play Dough Time… if you have every purchased something from a store. if you would like to have a mini store in the classroom. The big brown table will serve as our store, but there is one major problem…there are no products (goods) in the store! You are now producers. Use the productive resources (land, labor & capital) to produce one good similar to those produced in Lessons 2 & 3. Do good work since your products will be sold at the class store! (about 5 – 8 minutes) Once we have goods in our store, we will need volunteers / consumers to shop at the store.

At this time, we need the “Paper People” at each table to please come up to get a play dough container for each person in their group.

The volunteer / consumer must prefer at least two of the other goods to the one he/she has produced himself/herself. 1.The consumer will identify the one good he/she produced. 2. The consumer will identify two goods produced by other classmates that he/she most wants and would be willing to trade for. 3.The consumer must trade his own good for one of these two goods. 4.Identify the good not purchased as the consumer’s opportunity cost. 5.The consumer will then take the good to his/her desk. 6. A new consumer now gets to “go shopping.” Play Dough Time…Consumer’s Task

Our Hand-On Learning Time Has Come to an End. One table group at a time will come to get their sculpture. Please make sure your table and floor areas are clean. Please make sure your top is on tightly to your play dough container. Thank you for being great learners today!