Chapter 1 Section 2. Section 2 – tradeoffs Tradeoffs – sacrificing one good or service to...
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Transcript of Chapter 1 Section 2. Section 2 – tradeoffs Tradeoffs – sacrificing one good or service to...
![Page 1: Chapter 1 Section 2. Section 2 – tradeoffs Tradeoffs – sacrificing one good or service to purchase another. Individuals, families, businesses, and societies.](https://reader030.fdocuments.in/reader030/viewer/2022032605/56649e7d5503460f94b7fed3/html5/thumbnails/1.jpg)
TradeoffsChapter 1 Section 2
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Section 2 – tradeoffsTradeoffs – sacrificing one good or service to purchase another.Individuals, families, businesses, and societies are forced to
make trade-offs every time they use their resources in one way and not another.
Opportunity Costs – value of the next best alternative given up for the alternative that was chosen.
Other activities you could have chosen to do during that time.
![Page 3: Chapter 1 Section 2. Section 2 – tradeoffs Tradeoffs – sacrificing one good or service to purchase another. Individuals, families, businesses, and societies.](https://reader030.fdocuments.in/reader030/viewer/2022032605/56649e7d5503460f94b7fed3/html5/thumbnails/3.jpg)
Opportunity costsExamples:Could have slept in this morning if you had not gone to
school.Give up 4 years of income if you go to college.Congress spent $700 million on stimulus. Could have spent
it to reduce debt.Pg. 13 Global Economy story.
*You have opportunity costs every time you make a choice.
![Page 4: Chapter 1 Section 2. Section 2 – tradeoffs Tradeoffs – sacrificing one good or service to purchase another. Individuals, families, businesses, and societies.](https://reader030.fdocuments.in/reader030/viewer/2022032605/56649e7d5503460f94b7fed3/html5/thumbnails/4.jpg)
Production possibilityProduction possibility curve – graph showing the maximum
combinations of goods and services that can be produced from a fixed amount of resources in a given period of time.
Look at graph on page 15.Helps businesses determine how much of each items to
produce, revealing the trade-offs and opportunity costs involved in each decision.
![Page 5: Chapter 1 Section 2. Section 2 – tradeoffs Tradeoffs – sacrificing one good or service to purchase another. Individuals, families, businesses, and societies.](https://reader030.fdocuments.in/reader030/viewer/2022032605/56649e7d5503460f94b7fed3/html5/thumbnails/5.jpg)
Factors of productionThe Classic Example – Military Defense vs. Civilian
goods.
![Page 6: Chapter 1 Section 2. Section 2 – tradeoffs Tradeoffs – sacrificing one good or service to purchase another. Individuals, families, businesses, and societies.](https://reader030.fdocuments.in/reader030/viewer/2022032605/56649e7d5503460f94b7fed3/html5/thumbnails/6.jpg)
Create a poster like the one below illustrating an opportunity cost you may make in your life.