Opportunity Cost in Decision Making
This worksheet explores the concept of opportunity cost and its application in economic decision-making at the Grade 10 level.
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Opportunity Cost in Decision Making
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Read each question carefully and answer to the best of your ability. Show all your work for short answer questions.
1. What is the definition of opportunity cost?
The monetary cost of a good or service.
The value of the next best alternative that was not chosen.
The total cost of production for a company.
The profit gained from an investment.
2. You have $20 to spend. You can either buy a new book or go to the movies with friends. If you choose to go to the movies, what is your opportunity cost?
The $20 you spent.
The enjoyment of the movie.
The new book you could have bought.
The time spent at the movies.
3. Opportunity cost arises because resources are , meaning there isn't enough to satisfy all wants.
4. When making a decision, the opportunity cost is always the value of the alternative.
5. Opportunity cost only applies to financial decisions.
True
False
6. Every economic decision involves an opportunity cost.
True
False
7. Describe a real-life situation where you or someone you know had to make a decision involving opportunity cost. Clearly identify the choice made and the opportunity cost.