what you will learn... opportunity cost take this challenge in economics, opportunity cost is the...

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Page 1: What you will learn... Opportunity cost Take this challenge In economics, opportunity cost is the cost in terms of the ___________________ forgone
Page 2: What you will learn... Opportunity cost Take this challenge In economics, opportunity cost is the cost in terms of the ___________________ forgone

What you will learn ...

Opportunity cost

Take this challenge

In economics, opportunity cost is the cost in terms of the ___________________ forgone.highest valued option

Page 3: What you will learn... Opportunity cost Take this challenge In economics, opportunity cost is the cost in terms of the ___________________ forgone

1. Eason

Mary likes pop music. The order of her preference for pop singers is as follows:

2. Kelly 3. Nicholas

xample:

Page 4: What you will learn... Opportunity cost Take this challenge In economics, opportunity cost is the cost in terms of the ___________________ forgone

Suppose her mother gives her $300.

She wants to spend it on a ticket to one of the singers’ concerts. Each concert ticket costs $300.

1. Eason

Mary likes pop music. The order of her preference for pop singers is as follows:

2. Kelly 3. Nicholas

xample:

Page 5: What you will learn... Opportunity cost Take this challenge In economics, opportunity cost is the cost in terms of the ___________________ forgone

If your answer is giving up both Kelly’s and Nicholas’s concert tickets…

If she chooses to buy a ticket to Eason’s concert, what does she give up?

Incorrect! Think again !

Can she buy tickets to the two singers’ concerts if she does not buy a ticket to Eason’s concert?

+

Page 6: What you will learn... Opportunity cost Take this challenge In economics, opportunity cost is the cost in terms of the ___________________ forgone

If your answer is giving up a ticket to either Kelly’s or Nicholas’s concert...

Incorrect! Think again !

Which concert ticket will she buy if she is allowed to choose between them?

If she chooses to buy a ticket to Eason’s concert, what does she give up?

Page 7: What you will learn... Opportunity cost Take this challenge In economics, opportunity cost is the cost in terms of the ___________________ forgone

You should now realise that...

Mary only gives up Kelly’s concert ticket when she chooses to buy a ticket to Eason’s concert.

Chosen

Given up

Page 8: What you will learn... Opportunity cost Take this challenge In economics, opportunity cost is the cost in terms of the ___________________ forgone

You should now realise that...

Mary only gives up Kelly’s concert ticket when she chooses to buy a ticket to Eason’s concert.

Think zone

Q What is Mary’s opportunity cost of buying a ticket to Eason’s concert? Answer

Q Is the opportunity cost of an action measured in terms of money? Answer

Page 9: What you will learn... Opportunity cost Take this challenge In economics, opportunity cost is the cost in terms of the ___________________ forgone

Take this challenge 1

Q

Mary is considering which of three streams she should enrol in at high school.

Since there is no information on Mary’s preference, we do not know the answer.

Science stream?

Arts stream?

Business stream?

What is her cost of enrolling in the arts stream?

Page 10: What you will learn... Opportunity cost Take this challenge In economics, opportunity cost is the cost in terms of the ___________________ forgone

Take this challenge 1

Q

Science stream. Because it is the highest valued option forgone.

What is her cost of enrolling in the arts stream?

If Mary’s order of preference is as follows:

1. Arts stream2. Science stream3. Business stream

Mary is considering which of three streams she should enrol in at high school.

Page 11: What you will learn... Opportunity cost Take this challenge In economics, opportunity cost is the cost in terms of the ___________________ forgone

Take this challenge 2

Mary chooses between two options for her lunch:

Page 12: What you will learn... Opportunity cost Take this challenge In economics, opportunity cost is the cost in terms of the ___________________ forgone

Take this challenge 2

Mary chooses between two options for her lunch:

Q How will the cost of buying the sandwiches change if a fly is found in the bowl of noodles?

Page 13: What you will learn... Opportunity cost Take this challenge In economics, opportunity cost is the cost in terms of the ___________________ forgone

Take this challenge 2

If your answer is:

Incorrect! Think again !

Has the value of the highest valued option forgone changed?

Unchanged because the highest valued option forgone is still the bowl of Japanese noodles...

Page 14: What you will learn... Opportunity cost Take this challenge In economics, opportunity cost is the cost in terms of the ___________________ forgone

Take this challenge 2

If your answer is:

Unchanged because the highest valued option forgone is still the bowl of Japanese noodles...

Although the highest valued option foregone is still the bowl of Japanese noodles, the value of that bowl of noodles has decreased.

You should recall that when the value of the highest valued option forgone changes, the cost will change too.

Hence, the cost of buying the sandwiches will be ____.lower

Page 15: What you will learn... Opportunity cost Take this challenge In economics, opportunity cost is the cost in terms of the ___________________ forgone

Take this challenge 3

Q How will the cost of buying the sandwiches change if they do not taste the way she expected?

Page 16: What you will learn... Opportunity cost Take this challenge In economics, opportunity cost is the cost in terms of the ___________________ forgone

Take this challenge 3

If your answer is:

Incorrect! Think again ! Has the value of the highest valued option forgone changed?

Lower because the value of the sandwiches becomes lower...

Page 17: What you will learn... Opportunity cost Take this challenge In economics, opportunity cost is the cost in terms of the ___________________ forgone

Take this challenge 3

You should recall that when the value of the highest valued option forgone remains unchanged, the cost will change / will not change.

If your answer is:

Lower because the value of the sandwiches becomes lower...

Page 18: What you will learn... Opportunity cost Take this challenge In economics, opportunity cost is the cost in terms of the ___________________ forgone

Take this challenge 3

If your answer is:

Lower because the value of the sandwiches becomes lower...

Although the value of the sandwiches is lower, the value of the bowl of Japanese noodles _______________. remains unchanged

Page 19: What you will learn... Opportunity cost Take this challenge In economics, opportunity cost is the cost in terms of the ___________________ forgone

Take this challenge 4

Back to the concert ticket example.

If Mary can buy a ticket to Kelly’s concert at a 50% discount, will her cost of buying a ticket to Eason’s concert change?

50% off

Q

Page 20: What you will learn... Opportunity cost Take this challenge In economics, opportunity cost is the cost in terms of the ___________________ forgone

Take this challenge 4

If your answer is:

Incorrect! Think again!

Has the value of the highest valued option forgone changed? How many tickets to Kelly’s concert does she have to give up?

No, because the price of a ticket to Eason’s concert remains unchanged...

Page 21: What you will learn... Opportunity cost Take this challenge In economics, opportunity cost is the cost in terms of the ___________________ forgone

Take this challenge 4

If your answer is:

No, because the price of a ticket to Eason’s concert remains unchanged...

Mary has to give up ___ tickets to Kelly’s concert now.

two

X 2

Page 22: What you will learn... Opportunity cost Take this challenge In economics, opportunity cost is the cost in terms of the ___________________ forgone

Take this challenge 4

If your answer is:

No, because the price of a ticket to Eason’s concert remains unchanged...

The cost of buying a ticket to Eason’s concert _______ although the price of it remains unchanged.

increases