Ch. 1 Sec. 2 Trade-Offs

Choices How many choices do we face on a daily basis? What choices will some of us face after high school?

Trade-Offs Trade-Offs Examples of Trade-Offs? Sacrificing one good or service to purchase or produce another Exchanging one thing for the use or ownership of another Examples of Trade-Offs? Time Money Labor

Trade-Offs = Cost Opportunity Cost Value of the next best alternative given up for the alternative that was chosen. Every time you make a trade-off you lose an opportunity. That lost opportunity is your opportunity cost. Examples…

Production Possibilities Production Possibilities Curve Shows the max. combination of goods and services that can be produced from a given amount of resources. Producers use curve to decide how to use resources

“Guns or Butter” What do the goods represent? What would be the limited resources in this cartoon? What is it represented by?