Standard SSEF 2 b Explain rational decision making

Standard �SSEF 2 �b. Explain rational decision making

Marginal Cost v. Marginal Benefit �Marginal Cost- Anything negative about an alternative/cons �Marginal Benefit – Anything positive about an alternative/pros

Marginal Cost v. Marginal Benefit �People make decisions based on costs and benefits. �The benefits must always outweigh the costs. �When rational decisions occur, marginal benefit outweighs marginal cost. ******

EQ �Each word you use costs. 10 and you only have 2. 00. So count it up, you may only use 20 words to answer. �How do scarcity and opportunity cost affect our rational decisions?

The Paced Decision Making Model �P- Problem �A-Alternatives �C-Criteria �E-Evaluate �D-Decision

What is the problem? �What decision are you trying to make? �What is the issue at hand?

What are the Alternatives? �What actions are you considering? �What options are available to you?

What are the criteria important to the decision? �What goals do you hope to accomplish? �What results are you hoping to gain? �What criteria are more important than others? How do you rank them?

Evaluate each alternative? �Evaluate each alternative on the basis of criterion. �Give each alternative a plus or minus according to how well it meets the criterion.

Make a decision. �Calculate the net value of each alternative; which alternative best meets each criteria? �What do you gain with each alternative? �What do you give up with each alternative?

Complete the Activity � 1. Use the earlier question we answered and create your own cost benefit analysis chart. �Write a paragraph explaining how you used the PACED decision making guide to decide your answer. Also explain why the marginal benefits of that system outweighed the marginal costs.