Worksheet on understanding opportunity cost through real-life scenarios.

Let’s go through each scenario one by one. The key idea is: Opportunity cost = what you give up when you choose something else.

We’re looking for the *next best alternative* that was sacrificed — not just any random thing, but the most valuable option they didn’t pick.

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1. Sneaker factory uses only 4 engines to make new products. They could have made 6 engines or built a swimming pool for employees. What’s the opportunity cost?

→ They chose to make sneakers (using 4 engines).
→ Their other options: make 6 engines OR build a pool.
→ But note: they used 4 engines for sneakers — so they gave up making those 4 engines into something else? Wait — actually, the problem says “they could have made 6 engines” — meaning if they didn’t use them for sneakers, they could’ve produced 6 engines total? Or maybe it means they had capacity to make 6 engines instead of using 4 for sneakers?

Actually, rereading: “A sneaker factory uses only 4 of their engines to make new products. They could have made 6 engines...” — this is confusingly worded.

Wait — probably it means: They have engine-making capacity. Instead of using 4 engines to make sneakers, they could have used that same resource to make 6 engines (maybe meaning 6 units of engine output?) OR build a pool.

But opportunity cost is the *best alternative forgone*. So between “making 6 engines” and “building a pool”, which is more valuable? The problem doesn’t say — but typically in these problems, we assume the alternatives are mutually exclusive and we pick the one explicitly mentioned as the next best.

Actually, let’s look at standard interpretation: If they used resources to make sneakers, and those same resources could have been used to either make 6 engines OR build a pool — then the opportunity cost is the *more valuable* of those two. But since no value is given, perhaps we take both as possible, but usually in such worksheets, they expect you to list the alternative that was directly comparable.

Wait — another way: Maybe “made 6 engines” means they could have produced 6 engines instead of using 4 for sneakers? That doesn’t add up.

Perhaps it’s simpler: They chose to make sneakers with 4 engines. The alternatives were:
- Make 6 engines (so giving up 6 engines)
- Build a pool

But they can’t do both — so the opportunity cost is the *best* of those two. Since no preference is stated, maybe we assume “make 6 engines” is the direct production alternative, and “build a pool” is a different kind of benefit.

In many textbook problems like this, if they say “could have done A or B”, and they chose C, then opportunity cost is the better of A or B. But here, since it’s a factory, likely “make 6 engines” is the direct trade-off.

Actually, I think there’s a misreading. Let me parse again:

“A sneaker factory uses only 4 of their engines to make new products.” → So they’re using 4 engines to produce sneakers.

“They could have made 6 engines” → This might mean: with the same resources (labor, materials, time), they could have produced 6 engines instead of using 4 to make sneakers? That still doesn’t balance.

Alternative interpretation: Perhaps “engines” here is a typo or misnomer — maybe it’s “units” or “machines”? But let’s stick with text.

Another approach: In economics, opportunity cost is what you give up. So if they used resources to make sneakers, and those resources could have been used to make 6 engines OR build a pool, then the opportunity cost is whichever of those two is more valuable. Since the problem doesn’t specify, but in context of a factory, producing more engines might be the direct alternative.

But wait — the sentence says: “They could have made 6 engines or they could have built a swimming pool.” So two distinct alternatives.

Typically, in such cases, we consider the *most valuable* alternative forgone. But without values, perhaps the expected answer is “making 6 engines” because it’s a production alternative, while building a pool is a perk.

However, looking at similar problems online, often when two options are given, and one is clearly a business output vs. employee benefit, the business output is considered the opportunity cost.

But let’s check the other questions for pattern.

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2. Wicks family saved money. Could spend on vacation to Grand Canyon or buy body shop. Chose body shop. Opportunity cost?

→ They chose body shop.
→ Alternative: vacation to Grand Canyon.
→ So opportunity cost = vacation to Grand Canyon.

Clear.

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3. Coach Ben missed 3 days of class for football. Could have stayed home sick. Missed test. Opportunity cost?

→ He chose to go to football game.
→ Alternatives: stay home sick (and miss class anyway?) or attend class and take test.
→ The problem says: “He could have stayed home sick for the day. He also has a test he’d rather skip.” — so staying home sick would let him avoid the test too.

But he went to the game. So what did he give up? He gave up attending class and taking the test? Or he gave up staying home sick?

Actually, the opportunity cost is the next best alternative. If he went to the game, he couldn’t attend class or stay home sick. Between staying home sick and going to class, which is better? The problem says he’d rather skip the test, so staying home sick might be preferable to attending class.

But he chose the game over both. So the opportunity cost is the better of: staying home sick OR attending class.

Since he’d rather skip the test, staying home sick is likely the preferred alternative to attending class. So opportunity cost = staying home sick (and avoiding the test).

But the question is: “What is the opportunity cost of his decision?” His decision was to go to the game. So he gave up staying home sick (which includes avoiding the test) and gave up attending class. The best alternative is staying home sick.

So opportunity cost = staying home sick (and missing class/test).

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4. Kai studying for spelling bee. Friend invites to ice cream party. Decides to study. Opportunity cost?

→ Chose to study.
→ Gave up: going to ice cream party with friend.
→ So opportunity cost = going to the ice cream party.

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5. Local government for community mall. Take tax dollars from residents or businesses. Officials decide to fund from businesses. Opportunity cost?

→ Chose to take money from businesses.
→ Alternative: take money from residents.
→ So opportunity cost = taking tax dollars from residents.

Because that’s what they gave up — they didn’t tax residents, so the cost is the revenue they could have gotten from residents (or the burden they avoided placing on residents).

In opportunity cost terms, it’s the next best alternative use of the funding source. By choosing businesses, they gave up the option of taxing residents.

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Now back to #1.

Re-reading: “A sneaker factory uses only 4 of their engines to make new products. They could have made 6 engines or they could have built a swimming pool for their customers.”

This is awkward. Perhaps “engines” is meant to be “units of production” or “machine hours”. But let’s assume it’s literal.

If they used 4 engines to make sneakers, and with those same 4 engines, they could have made 6 engines (that doesn’t make sense — making engines with engines?).

Alternative interpretation: Maybe “made 6 engines” means they could have produced 6 additional engines instead of using the capacity for sneakers. But still.

Perhaps it’s a typo, and it’s “they could have made 6 pairs of shoes” or something. But we have to work with what’s given.

Another thought: In some contexts, “engines” might refer to production lines or machines. So using 4 machines for sneakers means they could have used those 4 machines to produce 6 engines (as in car engines?) or build a pool.

But building a pool isn’t a production output — it’s a capital improvement.

In economics, opportunity cost is the value of the next best alternative. Here, the two alternatives are:
- Produce 6 engines
- Build a swimming pool

Without knowing which is more valuable, but in a factory context, producing more goods (engines) is likely the direct alternative, while building a pool is an indirect benefit.

Moreover, in many similar worksheet problems, when a company chooses to produce one good, the opportunity cost is the other good it could have produced.

So for #1, opportunity cost = making 6 engines.

But let’s see the exact wording: “uses only 4 of their engines to make new products” — so they have more engines? “Only 4” implies they have more, but are using 4 for sneakers.

Then “they could have made 6 engines” — perhaps meaning with the resources used for those 4 engines in sneaker production, they could have made 6 engines instead.

That makes sense: the resource input for making sneakers with 4 engines could alternatively produce 6 engines.

So opportunity cost = 6 engines.

And the pool is another option, but perhaps less relevant or secondary.

Given that, and consistency with other answers, I’ll go with that.

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Final Answers per item:

1. Making 6 engines
2. Vacation to the Grand Canyon
3. Staying home sick (and avoiding the test)
4. Going to the ice cream party with her friend
5. Taking tax dollars from residents

But for #3, let’s refine: The coach chose to go to the football game. The alternatives were: stay home sick (and miss class/test) or attend class (and take test). Since he’d rather skip the test, staying home sick is better than attending class. So the next best alternative to going to the game is staying home sick. Thus, opportunity cost = staying home sick.

For #5, opportunity cost is the alternative funding source they didn’t use: taxing residents.

Now, to write concisely.

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Final Answer:
1. Making 6 engines
2. Vacation to the Grand Canyon
3. Staying home sick
4. Going to the ice cream party with her friend
5. Taking tax dollars from residents