How do opportunity costs affect your decisions? Because of scarcity, limited resources and people unable to have all that they want, economics involves the study of tradeoffs (choices)

Opportunity Cost Opportunity Costs – The cost of the next best alternative use of money, time or resources when one choice is made over another Example: Which job would you take…one paying $7/hr. or one paying $12/hr? (Question: If people get paid more per hour if they work overtime, why don’t people work as much as they possibly can?)

Economists, when talking of costs, are talking in terms of alternatives that are given up. Complete the Plan a Dance activity.

What does it meant to make a rational decision? Rational decisions occur when Marginal Benefits equal or exceed Marginal Costs. How many shoe workers should be hired? NUMBER OF SHOE WORKERS PAY PER HOURADDITIONAL (MARGINAL) PROFIT FROM SHOES PRODUCED 1$10$50 2$10$100 3$10$200 4$10$50 5$10-$30

SSEF 2 – The student will give examples of how rational decision making entails comparing the marginal benefits and the marginal costs of an action A. Illustrate by means of a production possibilities curve the tradeoffs between two options B. Explain that rational decisions occur when the marginal benefit of an action equal or exceed the marginal costs

How do Economists show Opportunity Costs? Diagram representing various combinations of goods and services an economy can produce when ALL resources are employed. Production Possibilities Frontier (PPF Curve)

Where are most societies? How do you get to point “X”?

Illustrate your own PPF Curve IHOP makes both pancakes and waffles. When employing all resources, it can make 100 waffles and 400 pancakes per hour. (Point A) When employing all resources, it can make 50 waffles and 800 pancakes per hour. (Point B) When employing all resources, it can make 10 waffles and 900 pancakes per hour. (Point C)

Based on your curve: What is the opportunity cost of moving from point A to point B? 50 waffles What is the opportunity cost of moving from point C to point A? 500 pancakes What is the opportunity cost of moving from point B to point C? 40 waffles

Copy these questions on a separate sheet of paper…. 1. What’s the opportunity cost of moving from point A to point B? 2. From point D to point B? 3. From point B to point C? 4. From point C to point A?

PPF Article Read article and answer the 3 questions at the end.

Automation may claim as many as 47% of current jobs by 2033, according to a recent Oxford University study. If you're planning a career that spans beyond the next decade, you may want to strike the following off the list. Why? 1. Bank Teller 2. Cashier 3. Receptionist 4. Telephone Operator 5. Mail Carrier 6. Travel Agent 7. Typist 8. News Reporter 9. Data Entry Associate 10. Telemarketer

Review the major vocabulary we’ve had so far 1. Opportunity Cost 2. Allocate 3. Scarcity 4. Land 5. Labor 6. Capital 7. Entrepreneur 8. Voluntary exchange