Standard

1. Standard SSEF2 b. Explain rational decision making

2. Marginal Cost v. Marginal Benefit Marginal Cost- Anything negative about an alternative/cons Marginal Benefit – Anything positive about an alternative/pros

3. Marginal Cost v. Marginal Benefit People make decisions based on costs and benefits. The benefits must always outweigh the costs. When rational decisions occur, marginal benefit outweighs marginal cost. ******

4. EQ Each word you use costs .10 and you only have 2.00. So count it up, you may only use 20 words to answer. How do scarcity and opportunity cost affect our rational decisions?

5. The Paced Decision Making Model P- Problem A-Alternatives C-Criteria E-Evaluate D-Decision

6. What is the problem? What decision are you trying to make? What is the issue at hand?

7. What are the Alternatives? What actions are you considering? What options are available to you?

8. What are the criteria important to the decision? What goals do you hope to accomplish? What results are you hoping to gain? What criteria are more important than others? How do you rank them?

9. Evaluate each alternative? Evaluate each alternative on the basis of criterion. Give each alternative a plus or minus according to how well it meets the criterion.

10. Make a decision. Calculate the net value of each alternative; which alternative best meets each criteria? What do you gain with each alternative? What do you give up with each alternative?

11. Complete the Activity 1. Use the earlier question we answered and create your own cost benefit analysis chart. Write a paragraph explaining how you used the PACED decision making guide to decide your answer. Also explain why the marginal benefits of that system outweighed the marginal costs.