Productivity, Trade-Offs, & Opportunity Cost

Notes by Stephanie

-Productivity: is a measure of the amount of goods and services produced with certain amount of resources.
-Productivity occurs when scarce resources are used efficiently.
-It goes when more output is produced with the same amount of resources.
-Trade-offs: are alternative choices people face when making a decision.
- To evaluate choices people may use a decision-making grid to list alternatives and criteria they may have.
-An example can be when a boy has to decide whether to buy a video game, a MP3 player, or a concert ticket. He can use a decision-making-grid to consider all his alternatives and evaluate his choices.
-Opportunity Cost: is the cost of the next-best alternative or choice a person may have when making a choice.
-Opportunity cost may be used for time, money, or resources.
-An example can be that a boy decided to buy a video game by giving up his opportunity cost that was the MP3 player.