practicewithopportunitycostanalysis.docVIP

Practice with Opportunity Cost Analysis Materials 4 different types of candy, gum, or crackers, cookies, snacks etc. (1 per student) Handout: Practice with opportunity cost analysis (1 per student) Overhead transparencies or power points slides: Visual 1: Characteristics of Cost Visual 2: Discussion Questions: Choosing a Snack Handout: Practice with Opportunity Cost Set Up When participants return to the classroom from the final break of the afternoon, they must make a choice. Prepare the choice situation so that it is ready as they come back into the room. Table 1: 2 types of candy or snacks, enough for half the class Table 2: 2 types of candy or snacks (different from the 2 options on table 1), enough for half the class. As participants re-enter the room, direct them to the tables, so that half the class confronts the choice on table 1 and half the choice on table 2. Instruct them that they may choose one of the items on the table or they may choose to take nothing. Ask participants to take their seats and tell them that the item they chose is theirs and they may eat it if they’d like to. Procedures Instruct participants to write down the opportunity cost of their individual choices. (Don’t skip this step. If they write it down, they have to confront it during the discussion instead of mentally “modifying” it during the discussion.) Then, ask for volunteers to share their answers. Ask for a definition of opportunity cost (the next best or forgone alternative). Tell participants we are going to build on the common experience of choosing a snack to work with the concept of opportunity cost. Review: (See overhead transparency.) Costs are to people. All costs are costs to the decision-maker. Costs are subjective; individuals value costs differently. Opportunity costs may change and changes in costs affect people’s choices. Only actions have costs. “Things” have no cost independent of decisions about their use. All costs lie in the future. Th