1. C1S3: Economic Choices and Decision Making
Main Idea:
Trade-offs are present whenever choices are made.

2. C1S3: Economic Choices and Decision Making
Key Terms:
Trade-off
Opportunity cost
Production possibilities frontier
Cost-benefit analysis
Free enterprise economy
Standard of living

3. (a)What is Calvin doing when his father asks him to do a chore
(a)What is Calvin doing when his father asks him to do a chore? (b)What other activity might Calvin have been planning to engage in?

4. (a)What are Calvin’s trade-offs when his father asks him to do a chore
(a)What are Calvin’s trade-offs when his father asks him to do a chore? (b)What will Calvin get if he does the chore?

5. How do the trade-offs for choosing to do the chore change after Calvin demands twenty-five dollars for it?

6. (a) How else might Calvin’s father have responded to the demand for twenty-five dollars? (b) How would this have changed the outcome?

7. Why do you think Calvin’s father says he is a “smart kid”?

8. Continued on next slide.

10. C1S3: Economic Choices and Decision Making
Trade-Offs and Opportunity Cost
Trade-Offs
Part of analyzing an economic problem
People will look at possible alternatives to a decision

11. C1S3: Economic Choices and Decision Making
Trade-Offs and Opportunity Cost
Opportunity Cost
The next best alternative that you give up
Can be measured in more than money

12. C1S3: Economic Choices and Decision Making
Production Possibilities
How economists illustrate opportunity cost
Identify possible alternatives

13. C1S3: Economic Choices and Decision Making
Production Possibilities
Fully Employed Resources
All points ON the curve represent maximum output
Point ‘d’ cannot be
reached

14. C1S3: Economic Choices and Decision Making
Production Possibilities
Opportunity Cost
If you are producing at one point on the curve, and wish to move to
another, it will cost
what you have given up

15. C1S3: Economic Choices and Decision Making
Production Possibilities
Idle Resources
Point ‘e’ represents inefficient work
Not all resources are being employed

16. C1S3: Economic Choices and Decision Making
Production Possibilities
Economic Growth
If population, or any other input, grows, it will result in expansion of the ppf

17. C1S3: Economic Choices and Decision Making
Complete “Reviewing the Facts” 1-12 on page 28 on a separate sheet of paper to hand in