ECN211 L2-Opportunity Cost_BB

ECN211 L2-Opportunity Cost_BB - ECN 211 Macroeconomic...

Info icon This preview shows pages 1–7. Sign up to view the full content.

View Full Document Right Arrow Icon
1 ECN 211 Macroeconomic Principles L2. Opportunity Cost and Production Possibility Curves 
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
2 Opportunity Cost When an individual makes a choice they always incur an “opportunity cost” The opportunity cost of any activity is the __________________________ because of that decision. This is why there is no such thing as a “free lunch”.
Image of page 2
3 Opportunity Cost Example A tailor may be able to sew either a pair of trousers or two shirts in an hour If the tailor opts to make the trousers, her opportunity cost will be ___________
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
4 Opportunity Cost of Attending Class What is the opportunity cost of attending this class today? Answer – the _______________ use of the 1 hour 15 minutes of time:
Image of page 4
5 “At the Margin” When we make choices we compare the marginal benefits ( _________  benefit from a decision) against the marginal costs  ( ___________  cost  from a decision) – The opportunity cost is part of the marginal costs. – Remember rational self interest. Ex. • When you are deciding to purchase a soda you compare the  _______________(no longer thirsty) with the ___________  (alternative things that you could of spent the $1 on).
Image of page 5

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
6 Production Possibility Curve (PPC) A way of illustrating the concepts of  scarcity  and  _____________ PPC defines the current limits on production capabilities in a
Image of page 6
Image of page 7
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern