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Opporunity Cost

Every economic entity, i.e., consumers, producers, and government, is envolved in choicing how to allocate that finite and scarce resources available to them. As a student you have a fixed amount of time available to allocate among various activities. You can spend time studying to pass economics or play video games. The more time you spend studying, the less time you have for video games, remember there are only 24 hours in a day. So the opportunity cost of studying is the benefit you would have received from playing Modern Warfare 3.

Below are a number of links to both white board presentations from the Khan Academy concerning Opportunity Cost:

  • Production Possibilities Frontier
  • Opportunity Cost
  • Increasing Opportunity Cost

  • and video lectures:

  • Introduction to the Production Possibility Curve
  • The Slope of the Production Possibilities Frontier
  • Economic Growth and the Production Possibilities Frontier
  • Capital Investment and the Production Possibilities Frontier