Opportunity cost worksheet answers. The definition of opportunity cost is the value of any alternative you must give up when you make a choice. Opportunity Costs can be broken into two parts: Explicit costs. 1. Use complete sentences. About This Quiz & Worksheet. Opportunity Cost is a concept that is utilized in many applications in economics (like the reason for trade), and the basic idea DOES NOT CHANGE. Opportunity Cost isn’t everything you give up . Both are choices given up in favor of another choice. Main Idea: A trade-off is the act of giving up one thing for another. Opportunity cost is what is given up because you choose to do something else. Opportunity Costs is the real cost of something you must give up to get it. 1 ©IRFoster Chapter 2 Trade-offs & Comparative Advantage Practice Problems Answer Key 1) Scarcity 2) Opportunity cost 3) The production possibilities frontier model 4) Attainable 5) Outside 6) Constant 7) True 8) Constant 9) 10) The figure below shows a production possibilities frontier between milk and cookies (PPF 1). When making decisions, it is crucial to think in terms of opportunity cost, because the opportunity cost of an action is often considerably more than the cost of any outlays of money. In what way are trade-offs and opportunity cost alike? every choice has an opportunity cost. More specifically, it is the value of the next best alternative. just the most-valued (“next-best”) thing; Opportunity Cost helps explain all human behavior, not just behavior in business or markets. An opportunity cost is the most desirable option of all those available, but there may be … is one of the most important concepts in economics and is the basis of all economic decision making. . 01_cohen_ch01.qxp 4/17/09 9:48 AM Page 5 Opportunity cost . Opportunity Cost Worksheet 2014 Deciding by thinking at the margin. Everything you do has an opportunity cost. Suggested Lesson Plan for this Worksheet . 4 2. This printable quiz and worksheet will test your understanding of opportunity cost in real life situations. FOR YOUR INFORMATION SCARCITY, OPPORTUNITY COST, AND TRADE 5 opportunity cost: cost of best alternative given up Scarcity means every choice involves a trade-off. As You Read Directions: As you read Section 2, answer the questions under each main idea below. . For example, if you want to go to the movies, the opportunity cost is you could have instead spent your money on food, or saved it. Write the correct answer on the answer blanks, or underline the correct answer in parentheses. 1. Who makes trade-offs? 2. 2.The need for individuals to make trade-offs results primarily from 1)wants are unlimited 2)incentives are irrelevant 3)consumers are irrational 4)means are unlimited ... 16.A major opportunity cost of going to college is 1)a fixed cost 2)a sunk cost 3)an opportunity cost 4)an external cost ... Answer Key Econ Test 1 Page 4 Version 1 1. Then apply your knowledge to the Guiding Question: How does opportunity cost affect decision making? Making choices is a fundamental principle of economics which is represented by the concept of trade-offs. The extra cost of adding one unit. Displaying all worksheets related to opportunity cost. Use Figures 2.1 and 2.2 to answer these questions. 1 Opportunity Cost SECTION 2 A. How does an opportunity coat differ from a trade-off? 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