1. 1 1.3 Opportunity Cost and Choice

2. 2 Opportunity Cost Overview: Because of ____________, whenever you make a choice you must pass up another opportunity. The opportunity cost of the chosen item or activity is the value of the _______________you must pass up. Opportunity costs __________ on your alternatives. Opportunity cost is a personal thing but in some cases, estimating a ______________for goods and services may work and be helpful in choosing. In other cases, the dollar cost may omit some important elements, particularly the value of ________ involved.

3. 3 Choosing Among Alternatives Economics assumes that your _________________will lead you to select the most valued alternative. ________________ is the ultimate limitation. ________________ cost is the cost that you have already incurred and cannot recover, regardless of what you do now.

4. 4 Understanding Cause and Effects of Economics Economic events don’t just happen. They almost always result from _______________that happened first. One of the best ways to understand an economic event is to look at the _____________ that caused it to take place. An important benefit of learning about past economic events is the insight you will gain into ___________________________ if similar events take place in the future.

5. 5 The Opportunity Cost of College “On average, college graduates earn about ____________ as much as high school graduates.” -W. McEachern ‘08

6. 6 Homework 2 vocabulary words to look up and write Key Concepts: – Questions # 1 - 5