Now that you have learned about budgets, you know that you cannot simply buy everything you want. Spending your money wisely involves making good economic choices.
To buy or do one thing, you must give up the chance to buy or do something else. This is called a trade-off. Now, consider the opportunity cost. This is what you give up to get what you want.
It’s important to think about both the trade-off and the opportunity cost when you make decisions about how to spend your money. Let’s look at a few examples with the Parker family. Look for the trade-off and the opportunity cost in each situation.
