Economic Choices and
Decision Making
Economics Chapter 1 Section 3 p.19-25
Read pages 19-20
Essential Questions: Can a simple model be an effective tool for
understanding economic activity?
Main Idea: Economic choices involve trade-offs and the careful
evaluation of opportunity costs.
1. How are trade-offs and opportunity cost related?
2. Would you have made the same decision as Jesse? Why or why
not?
3. What do economists mean when they talk about costs?
Share your answers with you shoulder partner (2 min).
Read pages 21-22
Main Idea: Economics face trade-offs when deciding what goods and services to produce.
4. What is the meaning of the term frontier when used by economists?
5. Why can production take place on or inside the frontier?
Share your answers with you shoulder partner (2 min).
Gerald has two choices for a summer job – manufacturing job that pays $10.25 an hour or a landscaping
job that pays $8.65 per hour. At the landscaping company he could work and have lunch with three of his
closest friends.
6.
For one 40-hour workweek, what would be the opportunity cost of accepting the
landscaping job?
7. What would be the opportunity cost of accepting the manufacturing job?
8. How might improvements in technology lead to economic growth?
Share your answers with you shoulder partner (2 min).
9. What factors make it possible for the economy to grow?
10. How can the production possibilities frontier be used to illustrate economic growth?
Read pages 23-25
Main Idea:
• Economists use a strategy called cost-benefit analysis to evaluate choices.
• The study of economics helps people become better citizens.
11. Does an economist’s model have value if data collected shows that his or
her theory is incorrect?
12. How are economic models and cost-benefit analysis alike and different?
13. How does cost-benefit analysis help make economic decisions?
14. How do you think our society would be different if citizens did not study
economics?
15. What is the difference between a subjective and an objective decision?
Share your answers with you shoulder partner (2 min).