Importance Of Opportunity Cost To Individual

CONTENTS

Importance of opportunity cost as related to:

1. Individuals,
   1. Firms or organisations
   1. Governments

IMPORTANCE OF OPPORTUNITY COST TO INDIVIDUAL

1. It helps individual to make decision.
2. It helps individual to allocate scarce resources.
3. Judicious use of resources.
4. Prioritizing our wants.
5.  It helps an individual to make wise choice.

IMPORTANCE OF OPPORTUNITY COST TO FIRMS

1. Decision making.
2. Helps to decide the method of production.
3. Helps in project execution.
4. Guides policy formulation and implementation.

Importance of Opportunity Cost to the Government

1. Resources allocation.
2. Decision making.
3. Preparation of budget.
4. Helps in project execution.

EVALUATION

1. List 3 importance of opportunity cost to individual.
2. State 2 importance of opportunity cost to a firm

READING ASSIGNMENT

Amplified and Simplified Economics for SSS by Femi Longe page 6-7

REVISION/ GENERAL EVALUATION

1. List ten renowned Economics in the world.
2. Why is the scale of preference important?
3. Mention  five importance of studying economics.
4. Give five definitions of Economics by various prominent Economists.
5. Differentiate between Want and Needs.

WEEKEND ASSIGNMENT

1.   Opportunity cost is the item…………. (a) left unbought (b) nominal cost (c) bought (d) money cost

2.   Opportunity cost helps to ensure……..  allocation of resources (a) wrong (b) optimum (c) minimum (d)   unhealthy

3.   Nominal cost is the same thing as………… (a) real cost (b) fixed cost (c) money cost (d) variable cost

4.   ……………….. is a situation where a particular goods is traded off in favour of another goods (a) Explicit cost (b) opportunity cost (c) implicit cost (d) marginal cost

5. The problem of making the right choice is resolved with the use of……….. (a) consumer price index (b) preferential treatment (c) scale of preference (d) allocation of resources

SECTION B

1. Differentiate between nominal cost and real cost        
2. State three importance of opportunity cost to each of the economic agents.