Remember the steps to CostZBenefit Analysis: I. Defining the Issue - a description of the nature ofthe issue or problem under investigation that will usually include a description of the current situation or policy, written as a question. ||. Identify Choices classification of options with an analysis ofthe costs and benefits of each. "I. Clarifying Criteria - a listing of the factors used to measure the costs and benefits and on which the final choice will be based. IV. Analysing Choices - apply the criteria to analyze the costs and benefits of each option. V. Evaluation/Conclusion the net benefit of each option is determined and the selection of option or artful combination of options with the greatest net benefit explained. Trade Offs Opportunity cost is about trade-offs. When making any choice, you have scarce resources (e.g., time/money) and you need to select the option that has the least opportunity costs. Trade Offs For each of the following, explain which one you would choose with an explanation of the trade-offs (opportunity costs) and the economic significance for individuals and society. 4) a) Buy a car or a transit pass. A car would allow me to travel wherever I wanted A transit pass is cheaper Transit pass is better for the environment TP cannot take exactly where I want, when I want Car insurance is expensive Parking can be expensive Maintaining a car can be costly b Rent an aoartment or bu a house. c) Send a child from an impoverished family to school or to work. d) Pay down government debt or increase government spending on infrastructure or social services