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Chapter 5 Lesson 4

This document discusses the concept of opportunity cost in financial decision-making, highlighting that it represents what is given up when making a choice. It provides examples of opportunity costs related to various decisions, such as attending school or working, and encourages students to identify their own examples. The lesson emphasizes that opportunity costs can vary for individuals and are not solely monetary.

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148 views2 pages

Chapter 5 Lesson 4

This document discusses the concept of opportunity cost in financial decision-making, highlighting that it represents what is given up when making a choice. It provides examples of opportunity costs related to various decisions, such as attending school or working, and encourages students to identify their own examples. The lesson emphasizes that opportunity costs can vary for individuals and are not solely monetary.

Uploaded by

serenamadampi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Financial Decisions and

Opportunity Cost
CHAPTER 5, LESSON 4

NAMES DATE
Serena Benny Mathew 04/08/25

DIRECTIONS
When we make decisions, we ofen have to give up something. Our second choice, or what we didn’t get
because of our decision, is called opportunity cost. Opportunity cost can be diferent for everyone. For
example, what do you give up every day to go to work or school? It could be sleeping in, surfng at the beach,
or taking the dog to the dog park. Remember, opportunity cost isn’t always about dollars and cents, but it
does have a value to the person or people involved.
Working together with your partner, look at the examples below and determine the opportunity cost for each
choice for each of you. Record your responses in the appropriate columns.

OPPORTUNITY COST: OPPORTUNITY COST:


EXAMPLE
STUDENT 1 STUDENT 2

Giving up time for homework Giving time for a job or time


Making the school team with family

Giving up being debt free Away from family


Going to college

Giving up extra money No income


Not having a part-time job

Losing homework time Losing opportunity to work or


Watching TV afer school other activities

(Continued on next page)

FOUN DATION S I N P E RSON A L FI N AN CE PAGE 1 O F 2


Financial Decisions and Opportunity Cost
CHAPTER 5, LESSON 4

OPPORTUNITY COST: OPPORTUNITY COST:


EXAMPLE
STUDENT 1 STUDENT 2

Extra money to spend Time because you'll need to


Leasing a new car get job to afford it

Lose family memory Sacrifice something to you


Selling a family heirloom

Lose financial freedom Will be in debt/ sacrifice


Credit card debt paycheck to pay debt

Lose extra money that could Sacrifice money that could go


Spending $250 on a
be used as an emergency to savings
game system

Lose $5000 that could be Sacrifice time to save up for it


Buying a $5,000 used car spent on college debt

Come up with three examples of your own. Then share with two classmates.

EXAMPLE OPPORTUNITY COST

Having job while being a student No extraextra time for friends and
extracurriculer activities

Saving money for college Putting most or all of the money towards it
since it's a really big purchase

Missing school for a track meet Missing important classwork and lessons that
might be helpful for tests and work

FO U N DATI O NS I N PERSONA L FI NA NCE PAGE 2 O F 2

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