This document discusses key concepts in opportunity cost economics including trade-offs, guns or butter, marginal thinking, and opportunity cost. It defines trade-offs as the alternatives given up when choosing one course of action over another for individuals and businesses. It explains guns or butter refers to allocating resources toward military goods versus consumer goods. Finally, it defines opportunity cost as the most desirable alternative given up as a result of a decision and marginal thinking as deciding how much more or less to do by adding or subtracting a single unit.

1. Opportunity Cost Economics 1