Opportunity Cost Review

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Opportunity CostReview
CHAPTER EIGHT MONEY MANAGEMENT NOTES
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Decisions ...

• We make decisions every day that have a
  consequence or a reaction to them.
• The cost of what we are giving up is our
  opportunity cost!

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Opportunity Cost

• In choosing the first choice you lost the
  opportunity to do the second.

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Opportunity Cost--Example
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Opportunity Cost

• You got caught up looking at bumper stickers on
  facebook and sending them to your friends! You
  were supposed to be finishing up an assignment
  from Ms. Garretts class

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Opportunity Cost

• Dont worry! Shell completely understand why you
  didnt turn in your assignment on time!
• NOT!

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Franklins Decision

• Franklin is an eleventh grade student at
  Enterprise High. He is a solid B student with
  the following options

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Option 1

• Take a part-time job after school that pays
  minimum wage and requires him to work from 4pm
  until 9pm on school nights. He can buy a used car
  right now with the extra money he is making and
  save money for college, but his grades would
  suffer.

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Option 2

• Join the football team who has practice every day
  after school. Franklin loves football. His coach
  thinks he has a good chance at receiving an
  athletic scholarship, but his Mom is worried
  about his grades and the possibility of him
  getting hurt.

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Option 3

• Study harder to improve his grades and qualify as
  a Student Tutor. This would give him spending
  money (not enough for a car) and help him score
  better on his college entrance exams. Some
  teachers think he could get an academic
  scholarship.

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• What should Franklin do?