5. Opportunity Cost
Let’s look at an example of opportunity cost.
Franklin is an 11th grade student at Enterprise High. He is a solid B student with the following options:
Option I. Take a part-time job after school that pays minimum wage and requires him to work from 4:00 P.M. until 9:00 P.M. school nights. The extra money would allow him to buy a nice used car now, and he could save some money for college. On the other hand, his grades would suffer.
Option II. Join the football team, which means he must practice every day after school. Franklin loves football. His coach thinks he has a good chance to get an athletic scholarship to a local college, but his mother is concerned about his grades. She is also worried about the possibility of his getting injured like his uncle who has bad knees as a result of playing professional football.
Option III. Study harder to improve his grades, and qualify as a “Student Tutor” in the after-school program. This would give him some spending money, and help him score better on the college entrance exams. Some of his teachers think he could get an academic scholarship if he spent his spare time studying. But tutoring would not give him enough income to get that used car.
Franklin has all of the standard teenage wants in alphabetical order: car, college, friends, money, and sports. In fact that’s his problem. He can’t do all three options at the same time. What should he do?
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