Social Studies: Economics: Opportunity Cost and Trade-Offs
Understanding choices, scarcity, and what is given up
Social Studies: Economics: Opportunity Cost and Trade-Offs
Understanding choices, scarcity, and what is given up
Social Studies - Grade 6-8
- 1
Maya has $20. She can buy a new book or save the money for a school trip. She chooses to buy the book. What is her opportunity cost?
Opportunity cost is the next best choice that is given up.
Maya's opportunity cost is the chance to put the $20 toward the school trip, because that is the best alternative she gave up when she bought the book. - 2
A city has enough money to build either a small skate park or repair playground equipment at one park. The city chooses to repair the playground equipment. Identify one trade-off in this decision.
One trade-off is that the city improves safety and usefulness at the playground, but it gives up the chance to build a new skate park for skateboarders. - 3
Explain the difference between scarcity and opportunity cost using a school example.
Scarcity is the problem of limited resources. Opportunity cost is the result of making a choice.
Scarcity means there are limited resources, such as only one hour of study time. Opportunity cost is what is given up, such as missing basketball practice when choosing to study for a test. - 4
Jordan has two hours after school. He can practice soccer, work on a science project, or play video games. He decides that working on the science project is his best option and soccer practice is his second-best option. What is the opportunity cost of working on the project?
The opportunity cost is practicing soccer, because it is the next best alternative Jordan gave up when he chose to work on the science project. - 5
A farmer can use a field to grow corn or soybeans. Corn is expected to earn $8,000, and soybeans are expected to earn $6,500. If the farmer chooses corn, what is the opportunity cost in dollars?
Look for the value of the best option not chosen.
The opportunity cost is $6,500, because that is the income the farmer gives up by not growing soybeans. - 6
A school cafeteria can add either a salad bar or a smoothie machine, but not both. List one possible benefit and one possible cost of choosing the salad bar.
A possible benefit of choosing the salad bar is that students have more healthy food options. A possible cost is that the school gives up the chance to offer smoothies. - 7
Tanya is deciding whether to spend Saturday earning $45 babysitting or going to a free concert with friends. She chooses the concert. What is the opportunity cost of her choice?
Even if the concert is free, choosing it can still have a cost.
The opportunity cost is the $45 she could have earned babysitting, because that is the value of the best alternative she gave up. - 8
A business owner has $10,000 to improve a store. She can buy faster checkout machines, redesign the window display, or hire a part-time worker. Explain why she must consider trade-offs.
She must consider trade-offs because her money is limited, so spending it on one improvement means she cannot use the same money for another improvement. - 9
Look at this choice: A state government can spend extra tax money on road repairs or on new computers for public schools. Create a sentence that identifies the opportunity cost if the government chooses road repairs.
Use the sentence frame: If the government chooses blank, it gives up blank.
If the government chooses road repairs, the opportunity cost is the new computers for public schools, because that is the alternative use of the money that is given up. - 10
Which choice shows opportunity cost most clearly? A student eats lunch. A student chooses between joining the art club and joining the robotics club. A student walks to class. Explain your answer.
The choice between joining the art club and joining the robotics club shows opportunity cost most clearly because the student must choose one activity and give up another valuable option. - 11
A family is planning a vacation with a budget of $900. They can choose a beach trip for $900 or a camping trip for $400 and save $500. If they choose the beach trip, what is one trade-off?
Think about both the activity and the money not saved.
One trade-off is that the family gets the beach trip, but they give up the cheaper camping trip and the chance to save $500. - 12
A student council has $300. It can buy decorations for the dance or purchase new board games for the student lounge. The council chooses decorations. Write one sentence explaining the opportunity cost and one sentence explaining a benefit.
The opportunity cost is the new board games for the student lounge. A benefit is that the decorations may make the dance more enjoyable for students. - 13
Why do people face opportunity costs even when they are not spending money? Give an example.
Resources can include time, attention, space, and effort.
People face opportunity costs because time and energy are limited, not just money. For example, if a student spends an hour watching a show, the opportunity cost might be an hour of studying or exercising. - 14
A company can make 1,000 bicycles or 500 scooters in a week using the same workers and machines. If it chooses to make bicycles, what does it give up?
The company gives up making 500 scooters that week, because the same workers and machines cannot be used to make both at the same time. - 15
Write a short paragraph about a real choice you might make this week. Identify the choice, the option you would give up, and whether the trade-off seems worth it.
Use the words choice, opportunity cost, and trade-off in your paragraph.
A complete answer should describe a real choice, identify the next best option given up, and explain whether the benefit of the chosen option is worth the cost. For example, choosing to study for a math test instead of playing games may be worth it because doing well in school is important.