Lesson Plan

• Define opportunity cost and differentiate between explicit and implicit costs.
• Explain why opportunity cost is essential for resource allocation and strategic decisions.
• Calculate opportunity cost using simple profit comparisons.
• Analyse real‑world business scenarios to identify the next best alternative.
• Evaluate decisions by comparing opportunity costs and justify chosen options.

• Projector or interactive whiteboard
• Slides with definitions, examples, and decision‑tree diagram
• Printed worksheet with bakery example and practice questions
• Calculator for students
• Whiteboard markers and chart paper
• Sticky notes for quick decision‑making activity

Begin with a quick poll: If you had £5 to spend, would you buy a book or a game? This taps into everyday decision‑making and links to the concept of opportunity cost. Review that every choice involves a trade‑off, and state that by the end of the lesson students will be able to define, calculate and apply opportunity cost in business contexts.

1. Do‑now (5'): Students write a personal choice they made yesterday and identify the foregone alternative.
2. Mini‑lecture (10'): Define opportunity cost, discuss explicit vs implicit costs, and show the formula on slides.
3. Guided example (12'): Walk through the bakery scenario, fill in the opportunity‑cost table on the board.
4. Group activity (15'): Teams receive a worksheet with different business scenarios, calculate opportunity cost, and present their answers.
5. Class discussion (8'): Compare group findings and explore why a business might accept a higher opportunity cost.
6. Check for understanding (5'): Exit ticket – one‑sentence definition and a numeric calculation of opportunity cost.

Recap that opportunity cost measures the value of the next best forgone alternative and is vital for efficient resource use. For the exit ticket, students write the definition and calculate opportunity cost for a given scenario. Homework: complete three additional opportunity‑cost problems from the textbook and bring a real‑world example to share in the next class.