Opportunity cost: let's assume you are deciding what to do during next week. You have several options available, but you do not prefer them equally. Assume you have the following options: work, study (going to the Macroeconomics class, doing assignments etc.), gym, watch a movie, and surf on the internet.

1. What is the set of preferences? (hint: the information is given above)
2. Rank your preferences: 1 to 5.
3. Identify the "most preferred" and the "best alternative".

Let us assume that you have a fixed amount of time to do these things. Let, time = 40 hours (you have 40 hours to do either your most preferred or the best alternative).

1. Opportunity cost of a choice is the value of the best alternative forgone. This question will help you to recall the definition of "opportunity cost". Construct a table of "time allocation" between your most preferred and the best alternative?

For example:

(Students are free to allocate time according to their choice)

Most Preferred (a most preferred choice)

Best alternative ( the best alternative choice)

....fill in you time allocation (as we did in the class)

..... fill in you time allocation

.... fill in you time allocation

..... fill in you time allocation

.... fill in you time allocation

..... fill in you time allocation

.... fill in you time allocation

.... fill in you time allocation

1. if we Represent the above table graphically.Do we have any scarcity problem, what is it?