Discussion: Scarcity and Opportunity Costs
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Chapter2.2.pdf
8/22/2020 Ch. 2_2 Opportunity Cost: Economics CC 2 Sec ON1 (22315) Fall 2020
https://clpccd.instructure.com/courses/21227/pages/ch-2-2-opportunity-cost?module_item_id=1202745 1/7
Ch. 2_2 Opportunity Cost
Get to know Basic Concepts:
Opportunity Cost
Opportunity cost is one of the most fundamental concepts in economics. It refers to the value a person could have received but passed up in pursuit of another option. Due to scarcity, choices must be made. Every choice has an opportunity cost. Everyone's goal is to make choices that maximize their satisfaction.
Opportunity Cost: How Much is Your Time Worth
8/22/2020 Ch. 2_2 Opportunity Cost: Economics CC 2 Sec ON1 (22315) Fall 2020
https://clpccd.instructure.com/courses/21227/pages/ch-2-2-opportunity-cost?module_item_id=1202745 2/7
Understanding opportunity cost is crucial to decision- making.
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Opportunity Cost (I)
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Opportunity Cost (II)
Opportunity CostsOpportunity Costs
8/22/2020 Ch. 2_2 Opportunity Cost: Economics CC 2 Sec ON1 (22315) Fall 2020
https://clpccd.instructure.com/courses/21227/pages/ch-2-2-opportunity-cost?module_item_id=1202745 3/7
Opportunity Cost
Opportunity cost: An opportunity cost is the highest-valued alternative that must be forgone when a choice is made. In other words, opportunity cost is the value of the next best alternative or option while making a decision.
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Lecture: Opportunity Cost
The Cost of Something is What You Give Up to Get ItThe Cost of Something is What You Give Up to Get It
8/22/2020 Ch. 2_2 Opportunity Cost: Economics CC 2 Sec ON1 (22315) Fall 2020
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Opportunity Cost: Two Examples
Example#1: An IT worker is offered a new job with a higher salary in a city with a lower quality of life. The opportunity cost of the higher salary is a lower quality of life such as reduced air quality. Example#2: The opportunity cost of after school violin lessons at a particular school is the ability to join other after school activities such as baseball or the chess club.
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Exercise--Opportunity Cost
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8/22/2020 Ch. 2_2 Opportunity Cost: Economics CC 2 Sec ON1 (22315) Fall 2020
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Measurement of Opportunity Cost
Example#1: Ford Company's Decision about Production
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8/22/2020 Ch. 2_2 Opportunity Cost: Economics CC 2 Sec ON1 (22315) Fall 2020
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Example#2: Gun or Butter Dilemma
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8/22/2020 Ch. 2_2 Opportunity Cost: Economics CC 2 Sec ON1 (22315) Fall 2020
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