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“Workaholic” Opportunity Cost

“Workaholic” Opportunity Cost. Read the section below and calculate the “cost” of the vacation. Explain why you included what you did as a cost:

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“Workaholic” Opportunity Cost

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  1. “Workaholic” Opportunity Cost • Read the section below and calculate the “cost” of the vacation. Explain why you included what you did as a cost: Workaholic Felix Alvarez is considering a trip to Sanibel Island, Florida for his spring vacation. He estimates his roundtrip airfare would be $275.00, his car rental $175.00, and hotel $950.00 for his 1-week trip. By going on vacation Felix would not be able to work and would therefore not earn his usual $1,250.00 per week. Felix spends the same amount on food and wherever he is.

  2. Act… • Triangle vs Square activity • Highlight opportunity cost of producing a square or triangle • Introduce next key concept: production possibility curve

  3. Production Possibility Curves (P.P.C.) • Used to illustrate opportunity cost • Definition: a diagram that represents various combinations of goods and an economy (person or many people) can produce when all its resources are in use • Lays out efficiency of an economy • Lays out the most optimal use of resources

  4. Example Curve • Alternatives • Fully employed resources • Cost of idle resources • Opportunity Cost • Economic growth

  5. Fish or Fruit Scenario You’re stranded on a desert island with absolutely nothing. The island does have an abundance of fish and fruit that is ready for the taking. You’re faced with the decision of how to get your food. What is your plan for survival??? • Explain decisions in relation to opportunity cost

  6. Act… • Watch me create a production possibility curve… • Create a P.P.C. with a partner • Answer the following questions: • Why can production take place only on or inside the possibility curve? • How does the graph show opportunity cost? • How could the graph show economic growth?

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