CONTENT STATEMENT
- Individuals, governments and businesses must analyze costs and benefits when making economic decisions. A cost-benefit analysis consists of determining the potential costs and benefits of an action and then balancing the costs against the benefits.
CONTENT ELABORATION
Economic decisions, whether they are made by individuals, governments or businesses, are generally made by weighing the costs against the benefits. This decision-making process is referred to as cost-benefit analysis. This standard should be incorporated throughout the year.
Historical examples can be found in decisions of early civilizations and countries to establish trade routes, engage in slave trade, explore and colonize new lands.
EXPECTATIONS FOR LEARNING
Explain why individuals, governments and businesses must analyze costs and benefits when making economic decisions.
Describe how cost-benefit analysis of an action consists of short- and long-term consequences.