Opportunity Cost

o The act of dealing with the problem of scarcity Choosing the best way to satisfy the most wants with our limited resources Decision Making

The opportunity cost of an activity is the value of all that is lost from taking one course of action over another. Ie. the benefit lost of choosing “Opportunity Cost”

You have $2000 burning a hole in your pocket. There are three things you would like to do, all costing $ Take a two week winter vacation to the beautiful island of Jamaica. 2. Buy a new 3D TV system. 3. Finance yourself to spend a summer working in Africa for a volunteer organization affiliated with the Canadian International Development Agency (CIDA). Whatever you choose, you will have to do without the other two (and what goes along with) = Opportunity Cost Example

Create a chart on a sheet of looseleaf in your binder. Answer the following: 1.How does the monetary cost of activity chosen compare to that of the opportunity not chosen? 2.Are monetary issues the only concerns when considering choices? 3.What other concerns must be taken into account when weighing opportunity costs? What are your Opportunity Costs?

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