Decisions, Decisions, Decisions
This lesson is about personal decision-making. The lesson introduces a five-step process of decision-making that can be used to make all kinds of decisions. Choices are inevitable because resources are limited. Every choice involves an opportunity cost. 

Review Definitions

• alternatives - Alternatives are the different options one has to satisfy a want or manage a problem.
• criteria - Criteria are goals and values used to evaluate alternatives. 
• scarcity - Scarcity is the condition of not being able to have all of the goods and services one wants. It results from the imbalance between relatively unlimited wants and the limited productive resources available for satisfying those wants. The price of a good or service reflects its scarcity. 
• choices - Choices are the alternative ways to solve or manage a problem.
• opportunity cost - Opportunity cost is value of the best alternative given up when making a choice. There is an opportunity cost to every choice. 

• What was Malcolm's problem?
• What are Malcolm's alternatives and criteria?
• Help Malcolm evaluate his alternatives.
• Help Malcolm discover his choice and opportunity cost.

When Malcolm received a $15 gift certificate for newspaper carrier of the month, he had to decide how to use his money.  Several items, or alternatives, caught his eye.  The problem was that he could choose only one.  View the video to see what choice he made and how he made it.

Check Understanding

crossword puzzle
test

Visit the e-toys Web site and select three toys that cost no more than $20.00 each. After adding the three toys to your shopping cart, return to this page by minimizing the e-toys window and find out how much you have to spend. Then using that sum of money, select the toy you can afford and identify your opportunity cost. 

After selecting three toys, click here to see how much you have to spend.