1. Opportunity Cost

2. Opportunity cost Unlimited Wants Choice Scarcity Limited Resources
Choose to satisfy some wants
= Give up some wants

3. Opportunity cost is…
The value of the highest valued options forgone

4. Let me choose a girl friend!
Mary
Sally
Betty
Let me choose a girl friend!

5. Very Pretty!

6. My O.C. of choosing Mary is…
Sally
Betty
My O.C. of choosing Mary is…
The value of Sally

7. If I can only choose Mary, my O.C. of choosing Mary is…
Sally
Betty
If I can only choose Mary, my O.C. of choosing Mary is…
None, because no choice, no O.C.

8. Exercise 1st Choice: Revision 2nd Choice: Sleeping
3rd Choice: Doing Sport

9. Q.1 The highest valued option is…
1st Choice: Revision
2nd Choice: Sleeping
3rd Choice: Doing Sport

10. Q.2 What options are forgone…
1st Choice: Revision
2nd Choice: Sleeping
3rd Choice: Doing Sport

11. Q.3 Which is the highest valued option forgone?
1st Choice: Revision
2nd Choice: Sleeping
3rd Choice: Doing Sport

12. Q.4 The opportunity cost of revision is…
1st Choice: Revision
2nd Choice: Sleeping
3rd Choice: Doing Sport

13. Q.5 The O.C. of Sleeping is… 1st Choice: Revision 2nd Choice: Sleeping
3rd Choice: Doing Sport

14. Q.6 The O.C. of doing sport is…
1st Choice: Revision
2nd Choice: Sleeping
3rd Choice: Doing Sport

15. Q.7 If mum order Mary to sleep, what is the O.C. of sleeping?
1st Choice: Revision
2nd Choice: Sleeping
3rd Choice: Doing Sport
None, because Mary has no choice, so she has no O.C.

16. The O.C. of watching Harry Porter is…
The value of Cars 2

17. The O.C. of watching Cars 2 is…
The value of Harry Porter

18. The O.C. of watching Kung Fu Panda is…
The value of Harry Porter

19. In what situation, there is no O.C. of watching Harry Porter?
When the other movies cannot be watched

20. Will O.C. change?
When the value of the highest valued option forgone changes, the O.C. changes.
O.C.
= the value of highest value option forgone (2nd option’s value)

21. My O.C. of choosing Mary is…
Sally
Betty
My O.C. of choosing Mary is…
The value of Sally

22. Situation 1: the value of highest valued option (1st choice) changes

23. My O.C. of choosing Mary change or not??
Sally
Betty
My O.C. of choosing Mary change or not??

24. Situation 2: the value of other forgone option (3rd choice) changes

25. My O.C. of choosing Mary change or not??
Sally
Betty
My O.C. of choosing Mary change or not??

26. Situation 3: the value of the highest valued option forgone (2nd choice) changes

27. My O.C. of choosing Mary change or not??
Sally
Betty
My O.C. of choosing Mary change or not??

28. My O.C. of surfing the net is…
Exercise
My O.C. of surfing the net is…
The value of playing basketball.

29. Exercise Event Change of O.C.
1. Sally’s best friend will play basketball with her
2. There are some problems in the Network
3. There is good desert when Singing Karaoke