Opportunity Cost Exercise
Think of two goods that you would like to purchase:
Good 1:
Good 2:
How much do these goods cost?
Good 1: £
Good 2: £
Describe the benefit you would get from each good:
"The benefit I recieve from consuming Good 1 is: "
"The benefit I recieve from consuming Good 2 is: "
Now assume that you only have enough money or time to purchase and consume one of the goods. Which good would you choose?
Summary:
The table below summarises the information you have provided:
| Good 1: |
Good 2: |
|
|---|---|---|
| Cost | £Good 1 | £Good 2 |
| Benefit | Good 1 | Good 2 |
In a world of scarcity, you have chosen .
Choose the answer that best completes the following statement:
The opportunity cost of consuming is:
Correct!
Well done, you’ve identified the correct opportunity cost for consuming .
Oops! Wrong answer
Don’t worry, just try again.
Remember: Opportunity Cost is the benefit of the next best alternative foregone.
Look at your summary table again. What item is being foregone when you consume ? What is the benefit of this foregone item?