1. Personal Financial Literacy

2. After returning a wallet to its owner, you learned that you will be receiving a reward.
In 2 minutes time, write down everything you might want to buy with the reward money. Include both goods and services. Start timer.
Because you will have limited money, you will need to make choices.

3. Put a star by the two items you want the most.
When you receive the reward money, you find out that you only have enough to purchase one item. Which of the starred items will you choose?

4. What was your opportunity cost?
Opportunity cost is the next best alternative that is given up when a person makes a choice.
Allow students to explain to their neighbor.
Answer: The item that they did not chose.
What was your opportunity cost?

5. Opportunity Cost
The item that you did not chose is your opportunity cost. (This is the item you gave up.)
Think of opportunity cost like money. When you buy an ice cream for $1, you can say the ice cream cost $1. So when you give up something for something else, you can say that it cost you the item you gave up.

6. Brett’s opportunity cost is saving for the skates.
Brett must decide whether to spend his $5 allowance at the toy store or save his money for skates. If he chooses to spend the money at the toy store, what is his opportunity cost?
Brett’s opportunity cost is saving for the skates. It will now take him longer to save for the skates he wants.
Brett’s opportunity cost is saving for the skates.

7. Abby’s opportunity cost is buying a bathing suit.
Abby must decide whether to use her earnings from babysitting to buy a bathing suit or to deposit it in her college savings account. If she chooses to put it in her college savings account, what is her opportunity cost?
Abbey’s opportunity cost is buying a bathing suit.
Abby’s opportunity cost is buying a bathing suit.

10. When have you had to make a choice due to limited money?
What choice did you make?
What was your opportunity cost?
Talk to your neighbor

11. How is opportunity cost like a scale?