Trade Offs and Opportunity Costs

Teaching Insights:

• Anchor the concept in real life experience for student.
• Graphs and Math SUPPORT the intuitive reasoning behind economic thinking.
• Most economic concepts are repetitive and used in a variety of application as we build the economic way of thinking.
• Know the key concepts very well!
• Economics has specific language/vocabulary … sometimes we use different words to get at the same concept.
• Have some fun.
• Ask and answer the rhetorical question: “What value is it to me?”

Anchor the concept of OPPORTUNITY COSTS:

What could you be doing instead of being here for this session?
(List your alternatives here.)

 

What is your opportunity cost for being here for the next hour?

 

How do economists use the concept of opportunity cost to explain a person making a mistake?

 

What is the Opportunity Cost for a high school student to study one hour for Economics?

 

What will confuse your students?

• Opportunity Cost isn’t everything you give up . . . just the most-valued (“next-best”) thing.
• Opportunity Cost helps explain all human behavior, not just behavior in business or markets.
• 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 Costs are half of the story of CHOICE.