1.4 - Opportunity Cost - Instruction

Raj wants to expand his bakery business to include bagels. In one hour of work, Raj can make 60 doughnuts or 30 bagels.

1. 30 2. 120 3. 90

Which statements demonstrate the meaning of opportunity cost for producers and consumers?

- If producers can only produce one item, they must decide which item to produce based on profit. - Consumers are limited by their resources, and must give up the chance to purchase one item in order to buy another. - When deciding to produce or purchase one item, another opportunity must be given up.

Refer to the graph and use the drop-down menu to answer each question. At what point is Raj not using all of his resources? At what point would Raj be using more than his available resources?

- Y - X

Opportunity cost is what must be _____ __ in order to ____ something else. Opportunity cost forces consumers and producers to make _______.

- given up - gain - choices

What could happen as a result of the effects of the opportunity cost on the left?

- missing out on spending time with friends - gives up a chance to have fun