1. 1.5.5 Syllabus Candidates should be able to: define opportunity cost assess choices and potential trade-offs

2. Opportunity cost Define opportunity cost: _________________________________ A business places its spending desires in the order of preference below. Which is the preferred choice? The opportunity cost? Advertising campaign Retrain workforce Redecorate the reception Buy new vehicles for sales staff?

3. Non-monetary opportunity cost Opportunity cost may be in financial terms or non-monetary (as with previous example). Sometimes it maybe possible to calculate the value of non-monetary opportunity cost e.g. the value of a trained workforce may be £x

4. Business choices and trade-offs Trade-off occurs when opting for one choice means _____________________________ It can also be defined as accepting less of one thing to achieve _______ of another. e.g. One key trade-off is between risk and reward. Often a high risk project may lead to very high _______________________

5. Example for an entrepreneur What are the rewards for a new entrepreneur? What is the trade-off?

6. How can an entrepreneur assess the trade-offs?

7. 1.5.6 Syllabus Candidates should be able to: evaluate the difficulties in moving from an entrepreneur to a leader

8. What are the difficulties?