Opportunity Costs

You use economic concepts on a daily basis without even knowing it! When you decide whether or not to eat lunch at a restaurant or make a sandwich at home, you are making a decision based on the costs and benefits of those options. Economists use these same basic tools to examine economic issues. Think about one choice you made in the past several days and explain how this could be analyzed using economic concepts such as tradeoffs, opportunity costs, and marginal analysis. Discussion Checklist: How does the concept of “tradeoff” relate to “opportunity costs?” What is the difference between monetary and non-monetary opportunity costs? Why are opportunity costs based on a person’s tastes and preferences?

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