Tradeoffs/ Opportunity Cost

Production Possibilities Curve

Danielle Adams
 Tradeoffs
• The exchange of one good or service to purchase or produce
another.

• The result of a trade-off is what you give up in order to get or

do something else.
 Opportunity Cost
• The value of the next best alternative that had to be given up to
do the action that was chosen.

• An attempt to produce more of any good, means giving up more

and more of the other goods.
 Guns vs. Butter

• Classic example between military

defense and civilian goods.

• The amount of military goods

given up in the year is the
opportunity cost for increasing
civilian goods production
 Production Possibilities
Curve
• Used to illustrate opportunity cost
• A graphical representation showing various maximum
combinations of goods and services that can be produced
from a fixed amount of resources in a given period of
time.
Commercial Banks
and Credit Unions
Stephanie Tucker 5th
 Commercial Bank

• Control largest amounts of money

• Accepts deposits
• Business loans
• Deposit Accounts
• Savings
• Checking
• Time deposit
• Owned by a group of individuals
 ASSETS OF FDIC-INSURED
COMMERCIAL BANKS, 2007

Assets are

http://www.iii.org/financial2/banking/commercial
 Credit Unions
• Owned and operated by its members
• Savings accounts
• Low interest loans
• Higher interest rates on savings
Credit Unions