1. Warm Up What steps do you think goes into making a rational decision?

2. Decision Making Process Specify – Identify the need/want – Determine your goals Search – Gather information Sift – Look at all your options and opportunity costs Select – Make a choice Study – Evaluate the results

3. Specify Need or want: footwear Goals: – Sandals – $30 or less – Stylish

4. Search Compare sandals from 4 stores WATCH out for impulse purchases! Guess What? Retail and grocery stores place small, inexpensive items near the checkout counter because they know customers will buy them on impulse!

5. Sift Look at your options – Black leather for $28 – Plain tan fabric for $25 Look at your opportunity costs – Leaning toward leather because they will last long – Opportunity cost is the second best use for the $3 that would be in your pocket if you bought the $25 fabric pair – Trade off of choosing the fabric pair is the shorter life of the sandal

6. Select and Study Compare the benefits and cost of each option Evaluate your purchase

7. Closure Why is making a rational buying decision important? Why not just go to the mall and spend all your money? Explain trade-off.