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Week 1 · Lecture outline

Week 1 — Lecture Outline · Scarcity, Opportunity Cost & the PPF

Principles of Microeconomics · ECON 1 Fall 2026 · Prof. Kessler Fictional sample

Course: Principles of Microeconomics (ECON 1) · Silver Oak University (fictional sample) · Prof. Kessler
Objective 1 — economic modeling & quantitative/graphical analysis; scarcity, opportunity cost, the PPF; positive vs. normative · SLO A & B
Meeting pattern: two 75-min sessions (≈150 min). Segment minutes below total ~150 — scale to your room.

The deck (E), the tutorial (C), and the workshop (P) all teach from this outline. Every number here is pre-computed and independently verified (see the verified box in §4).

Week at a glance
Big question What does a choice really cost — and how do economists model it?
By week's end students can (1) define scarcity & explain why it forces choice; (2) compute opportunity cost in goods and dollars; (3) read a PPF — slope = opportunity cost, bowed shape, efficient/inefficient/unattainable points; (4) tell a positive statement from a normative one.
Key vocabulary scarcity, opportunity cost, trade-off, marginal thinking, incentives, model, ceteris paribus, production possibilities frontier (PPF), efficient/inefficient/unattainable, increasing opportunity cost, positive vs. normative
Materials whiteboard; the Week-1 readings/links; Desmos or a spreadsheet for the PPF; an approved chatbot
Timing note 8 segments ≈ 150 min across two sessions. Trim Segment 7 (interaction) if short on time.

Segment 1 — HOOK: "What did your last hour cost you?" (12 min)

Open with a show of hands: "Who slept in or scrolled their phone in the last 24 hours instead of doing something 'productive'?" Everyone. Then the promise: "By the end of this week, you'll be able to put a real number on what that hour cost — and you'll never call anything 'free' the same way again."

The core move of economics: there is never enough — not enough time, money, workers, oil, clean air — to satisfy every want. That's scarcity, and scarcity forces choice. Economics is the study of those choices. Note the frame for the whole course: micro zooms in on individual choosers — people, firms, single markets — while macro (a different course) zooms out to the whole economy.

Segment 2 — PLAIN-LANGUAGE IDEA: opportunity cost (18 min)

Teach it in one sentence first, then formalize:

Opportunity cost = the value of the next-best alternative you give up when you make a choice.

Plain-language build: every "yes" is also a "no" to something else. The cost of a choice isn't just the money on the price tag — it's what else that money, time, or effort could have done. The "next-best" part matters: you only give up the one best alternative, not all of them.

Two quick, concrete reads (no math yet):
- A free concert ticket isn't free if you skip a $120 shift to go.
- Choosing to major in nursing isn't "free of" the marketing career you didn't pursue.

Memory hook: "There's no such thing as a free lunch." Someone always gives something up — even if it's just the time spent eating.

Introduce three lenses we'll use all term (name them now, use them weekly): think at the margin (one more hour, one more unit), follow incentives (people respond to costs and benefits), and trade-offs are everywhere (more of one thing means less of another).

Segment 3 — WORKED EXAMPLE #1: opportunity cost in dollars (15 min)

Set it up on the board and do every step out loud.

Maya has a 6-hour Saturday block. She can tutor for $20/hour, or spend the time however she likes.

  • If Maya tutors all 6 hours: she earns 6 × $20 = $120.
  • If Maya instead takes the Saturday off, the opportunity cost of her leisure = $120 — the money she gave up.
  • Flip it: if she values her Saturday off at more than $120, taking it off is the better choice; if less, she should tutor. The decision rule is a comparison of opportunity costs.

Say it in words (this is the SLO-A habit): "The free Saturday 'costs' $120 — that's not a fee she pays, it's income she forgoes." Forgone benefits are real costs.

Segment 4 — THE PPF: the model that shows scarcity on one graph (28 min)

Now the week's centerpiece graph. The production possibilities frontier (PPF) shows the maximum combinations of two goods an economy (or a person) can produce with fixed resources and technology.

Build the model from a scenario (described-graph walkthrough — draw it as you go):

A student, Sam, has 12 hours this week to make two things for a club fundraiser: pizzas (each takes 2 hours) or tutoring sessions (each takes 4 hours).

  • All 12 hours on pizza → 12 ÷ 2 = 6 pizzas, 0 tutoring → plot point (6, 0).
  • All 12 hours on tutoring → 12 ÷ 4 = 3 tutoring sessions, 0 pizza → plot point (0, 3).
  • Connect them. Because the trade-off here is constant (every tutoring session always costs the same), this PPF is a straight line: 2·(pizzas) + 4·(tutoring) = 12.

✅ VERIFIED NUMBERS (pre-computed; do not recompute live)

  • Endpoints: (6 pizzas, 0 tutoring) and (0 tutoring sessions, 3).
  • Slope = opportunity cost. Moving from (6,0) toward (0,3): give up 6 pizzas to gain 3 tutoring sessions → 1 tutoring session costs 2 pizzas; equivalently 1 pizza costs ½ a tutoring session.
  • A point inside the line (e.g., 2 pizzas + 1 tutoring uses 8 hrs) is inefficient (4 idle hours). A point outside (e.g., 6 pizzas + 2 tutoring) is unattainable (would need 20 hrs).

Read the graph out loud (the four things a PPF shows at once):
1. Scarcity — you can't be outside the frontier.
2. Trade-offs — to get more tutoring you slide down the line and lose pizzas.
3. Opportunity cost — the slope is exactly how many pizzas each tutoring session costs.
4. Efficiency — points on the frontier use every resource; points inside waste some.

Why real PPFs bow outward (increasing opportunity cost): resources aren't equally good at everything. As a country pushes all-in on one good, it has to pull over resources that were lousy at it, so each extra unit costs more and more of the other good. That's why a realistic PPF is bowed out (concave), and the slope gets steeper as you move down it. (Our straight-line Sam example is the simplified constant-cost case; show both.)

Segment 5 — POSITIVE vs. NORMATIVE: keeping arguments honest (15 min)

The second tool of the week, and one that prevents most bad economics arguments:

  • Positive economics — descriptive, testable claims about what is: "A $15 minimum wage will reduce teen employment by X%." Could be right or wrong, but it's about facts.
  • Normative economics — value judgments about what ought to be: "The government should raise the minimum wage." No data settles a should.

Drill (rapid-fire, thumbs up/down): classify each — "Rent control causes housing shortages" (positive), "Housing is a human right" (normative), "Cutting the gas tax lowers pump prices" (positive), "We ought to tax carbon" (normative). Misconception to kill: "positive = good, normative = bad." No — positive means factual, normative means value-laden. Both matter; good policy needs both, but you must know which is which.

Segment 6 — TECHNOLOGY WORKFLOW + AI-CRITIQUE (20 min)

Live demo (Desmos or spreadsheet): plot Sam's PPF by graphing the line 2x + 4y = 12 (x = pizzas, y = tutoring). Drag a point along it to show the trade-off; mark an interior point (inefficient) and an exterior point (unattainable).

AI-critique moment (do this with the class): Ask an approved chatbot: "On a PPF for pizzas and tutoring with 12 hours, pizza = 2 hrs, tutoring = 4 hrs, what is the opportunity cost of one tutoring session?" Then audit it together: the right answer is 2 pizzas. Chatbots frequently flip the ratio (say "½ a pizza"), confuse opportunity cost with the time cost, or forget to express it in the other good. Make the class catch the error and state the correct reasoning. The habit all term: the tool drafts, you judge.

Segment 7 — INTERACTION: think-pair-share (12 min)

Pose: "Your college says tuition is $0 this semester thanks to a grant — so college is 'free' this term. As an economist, is it?" Pairs argue, then share. Target answer: no — the big cost of college is opportunity cost (the wages and work experience forgone while enrolled), which the grant doesn't touch. This previews next week (trade) and seeds Discussion 1.

Segment 8 — CALLBACKS, TEASE & THE WEEK'S WORK (10 min)

  • Callback: every example today shared one engine — scarcity forces a trade-off, and the trade-off has a cost.
  • Tease next week: "If trade-offs are everywhere, how can both sides of a trade come out ahead? Next week: comparative advantage and the gains from trade — the closest thing economics has to a magic trick."
  • The week's work: Lecture Tutorial (scarcity → opportunity cost → PPF → positive/normative), Practice (6 reps), Quiz 1, Discussion 1, Assignment 1, and Workshop 1 (build a PPF on Desmos and read opportunity cost off the slope).

Instructor FAQ — common stumbles

  • "Isn't opportunity cost just the price?" No — it's the value of the next-best alternative, which often includes forgone time/income with no price tag. The $120 Maya gives up has no receipt.
  • "Why is the PPF a curve and not a line?" Increasing opportunity cost: resources are specialized, so each extra unit of one good costs more of the other. The straight-line case (constant cost) is the simplified version; real frontiers bow out.
  • "Slope vs. opportunity cost?" On a PPF they're the same thing: the slope's magnitude is the opportunity cost of the good on the x-axis (in units of the y-axis good). Watch which good is which.
  • "A point inside the PPF — is that bad?" It's inefficient (resources idle, e.g., unemployment), not impossible. On the frontier = efficient; outside = unattainable (for now).
  • "Positive vs. normative — which is 'better'?" Trick framing. Positive = factual/testable; normative = value judgment. Neither is "better"; mixing them up is the error.
  • "Sunk costs?" Tease only: money already spent and unrecoverable shouldn't affect a forward-looking choice — opportunity cost is about future alternatives. (Full treatment later.)

~ Prof. Kessler's edition · Fall 2026 · built with thecoursemaker.com