Think about a decision you have had to make. Your Aunt sent you $20 for your birthday. What did you choose to do with it? decisionAfter you made your decision, did you get the most from that choice, Why or why not? Why do you think decisions and choices are sometimes hard to make? We make personal decisions and we make decisions as groups. Decisions are hard to make because we can’t have everything we want. This is called scarcity.

Because of scarcity we must make a choices. Whenever a choice is made, something is given up. There is a tool you can use to improve your decision making that will help you reach a better outcome.


You are going to learn about a making choices and using a decision making model. The decision making model can help you learn how to think about the benefits and the costs of making a particular decision. You will have the chance to make a decision by yourself and in a group. In the future, you can apply this model to other choices you may have to make.


Unlimited Wants:

  • Name something you wanted last year?
  • Do you still want that item?
  • Why do "wants" change?
  • Do you ever seem to run out of "wants?"

Limited Resources:

If we had unlimited dollars, could all of us purchase everything we wanted?

  • What are resources?
  • There is a limit to the amount of resources we have available to produce goods and services we all desire.
  • Scarcity: Scarcity is the result of unlimited wants and limited resources colliding.

Opportunity Cost:

jump ropeEvery resource has an alternative use. An opportunity cost is the next best alternative that is given up when a choice is made. Example if you have an hour after school, you might be able to a)homework play a game, b) play with friends, c) do homework or d) read a book. Suppose you rank your choices from highest use to lowest: read a book, play with friends, play a game, do homework. Your first choice would be then to spend the hour reading a book. Your opportunity cost is not all the choices given up, but the next best alternative – in this case it would be playing with friends. Playing with friends would be your opportunity cost.

P.A.C.E.D. Model:

  • Define the Problem
  • List the Alternatives
  • Identify your criteria
  • Evaluate the alternatives using the criteria
  • Make a decision

Practice Activity:

Learn the P.A.C.E.D. model and then divide into groups of twos or threes. When you have finished reading, answer the bottom questions and share the results with the group. Did everyone make the same choices? How may of each item were chosen? Explain your choices to the group.

Your Choice Activity:

Complete the model on your own and make a decision about a "gift certificate."

Matching Activity:

This is a quick matching exercise to let you determine whether you can place the steps in the correct order.

Mission Possible Activity:

Split into small groups and complete the "Mission Possible" handout. On the list are items you might desire for your classroom. Four "wild" spaces are provided so that you may add other items. Before you can add other items, you must investigate the approximate yearly cost of the item and check with the teacher to identify it as a) allowed in school, b) not dangerous, c) priced accurately. Before you begin, state your problem and identify the criteria using the choice handout.


Most students have practiced thinking of "alternatives" to the choices they are making, but the decision making is generally based on their limited experience or impulse. The addition of criteria will help you think through the important limitations as well as what really is important. You might want to pose several questions or problems to other students so that the skills can be practiced. Of course, the first time or two will take the most time, but soon it will become a familiar tool. Be sure and emphasize that you may differ from one another in criteria that you will use. Remember that the criteria may not be the same even when working through the same problem.


  • Fill in the acronym of P.A.C.E.D. and write a brief explanation of each step.
  • Take home a decision-making problem to solve with your family using the Decision Making Model.