Economics · Lesson Plan
Opportunity Cost
Every choice has an opportunity cost — the most desirable alternative you give up. Aligned to National Content Standards in Economics (Standard 1), this evaluation covers the factors of production, capital, efficiency, and the production possibilities frontier. Students answer eight multiple-choice questions and an essay that asks them to draw and interpret a production possibilities graph (answer key included).
For Teachers
Lesson at a glance
- Topic
- Economics
- Grade Level
- Grades 9–12
- Resource Type
- Lesson + Worksheet
- Estimated Time
- 30–45 minutes
- Format
- Worksheet + answer key
- Materials
- Printable lesson, worksheet, whiteboard
What Students Learn
Learning objectives
- Define opportunity cost as the best alternative given up
- Identify the factors of production, including capital
- Explain what an efficient economy is
- Read and draw a production possibilities frontier
- Use a PPF to show the opportunity cost of a decision
Materials
What you’ll need
- Printed worksheet and answer key (one per student)
- Graph paper for the essay
- Pencils
Key Terms
Vocabulary
- Opportunity cost
- The most desirable alternative given up when you choose.
- Factors of production
- The resources used to make goods and services.
- Capital
- Human-made resources used to produce other goods and services.
- Efficient economy
- One that makes the most goods and services from its resources.
- Production possibilities frontier
- A graph of the maximum an economy can produce.
- Underutilization
- Producing below the maximum the resources allow.
For Teachers
Lesson plan
Estimated time: one 30–45 minute class period.
Lesson sequence
- Review (8 min). Recap opportunity cost, factors of production, and the production possibilities frontier.
- Multiple choice (15 min). Students answer the eight standards-aligned questions.
- Essay & graph (15 min). Students draw a PPF for a two-product country, marking four production points, their opportunity costs, and a point of underutilization.
- Review (7 min). Check answers with the key and discuss the apples-vs-shoes scenario.
Assessment
Assess the multiple-choice answers against the key and the essay graph for a correct PPF.
Discussion
Discussion questions
- What is the opportunity cost of a decision?
- What are the factors of production?
- What makes an economy efficient?
- What does a production possibilities frontier show?
- What happens to prices if a country produces only one of two goods?
Printable Worksheet & Answer Key
Opportunity Cost — Worksheet & Answer Key
A printable, standards-aligned opportunity-cost evaluation: eight multiple-choice questions, a production-possibilities graphing essay, and an answer key.
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