As a senior student, you make economic choices daily.
HOW?
Imagine you want to watch a movie at the local movie theater.
You first have to consider the price of Admission:
General (14-64) $11.75
Child (3-13) $8.99
Senior (65+) $8.99
OR whether you want to see the movie in 3D:
3D General (14-64) $14.75
3D Child (3-13) $11.99
3D Senior (65+) $11.99
However, seeing a movie also involves purchasing food and drink.
As the consumer you have to consider: what size drink/popcorn you want, the quantity of each item, and if you want to also purchase other food items such as chocolate, candy, ice cream, hot dogs, fries, etc.
Here is a list of food/drink prices for a normal theatre
(like CINEPLEX ODEON):
Pop
S-$4.50 M-$4.75 L-$5.00
Popcorn
S-$4.75 M-$5.25 L-$5.00
Chocolate Bar
$2.50
Ice Cream
S-$3.50 M-$3.75 L-$4.00
Candy
$3.50
Hot Dog
$6.50
Fries
S-$5.00 M-$6.00 L-$6.25
Imagine you only have a budget of $30.00. How will you spend your money?
This is the dilemma of opportunity cost.
Opportunity cost refers to the alternative(s) that is/are sacrificed when (a) choice(s) is/are made. Other examples of opportunity cost involved with this scenario include: if you only have a certain amount of time to watch a movie, or if you have an economics test tomorrow but choose to see a late night movie instead.
Therefore, if you have a scarcity of time, money, etc. at a movie theater, you have to make choices based upon that scarcity. Should I choose to watch a movie another night when I do not have to study for a test? Should I buy the chocolate bar instead of the candy? Should I purchase a Small pop/popcorn instead of a Large?
Each choice will provide
a low opportunity cost: the choice(s) made incur(s) a high benefit
AND/OR
a high opportunity cost: the choice(s) made incur(s) a low benefit
to determine the best decision.
