Scarcity Choice Opportunity Cost Unlimited Wants Limited Resources

Scarcity Choice Opportunity Cost

Unlimited Wants Limited Resources Scarcity Opportunity Cost Choice

Scarcity is scarce if Goods are -a 1) universal we want toproblem. have more of it, It its happens everywhere, 2) availability cannot satisfy whether in a rich or poor country. every want for it. -a relativeofconcept. Example scarce goods: Whenever we want more that we have, Money, happy, health, friendship, etc. Scarcity exists.

Opportunity Cost of a choice is the highest valued option forgone.

1. Cost arises from making choices. 2. Cost changes only if the highest-valued option forgone changes. 3. A change in cost is not equal to a change in value.

The value of go on picnic The value of goofon picnic Although the value decrease, increase, then the playing tablethen tennisthe decrease, cost itopportunity is not the opportunity cost, opportunity costdecrease. increase. then the opportunity cost is no change. No Opportunity Cost: change Go for picnic. Yesterday, there But the food very I think thewas table of tasty, we still enjoy it were many rubbish yesterday is very much, we were in very the countryside. bad. Yesterday, I could go on a picnic with family and I could play table tennis with my friend. At last, I played table tennis with friend. Then the opportunity cost is go on the picnic with family. Case 1 happy yesterday. Brother (go on picnic) Friend (play table tennis)

Dress $122 Jeans $150 2 1 3 Coat $100 Skirt $50 T-shirt $80 When I choose skirt, skirt My first priority is skirt, My opportunity cost is coat She have $100. Case 2 When I choose coat, coat is coat, the second priority My opportunity cost is skirt When I choose T-shirt, T-shirt the third priority is T-shirt. My opportunity cost is skirt Unavailable options: Dress, Jeans Available options: Coat, Skirt, T-shirt

Scarcity arises is because we the supply of example, do notbecause want more of it. For resources or goods is sea water. Scarcity is a relative concept. fixed It depends on in thesupply, quantity available am right? Do you know? relative to. Iwants. NO! NO! YOU ARE WRONG! Yes! Case 3

Miss Cheng could spend two hours at a concert or tutoring a student at $70 per hour. She could use the time on painting instead and earn a total of $170. If the price of the concert ticket is $250, what is the opportunity cost of her choice of going to the concert? A. $410 B. $420 C. $430 D $440

No. of coupons Gifts 5 15 20 Cup Bag Camera A. Cup B. Bag Mary has accumulated 20 Coupons. What is the opportunity cost to her if she uses them to exchange for one camera? C. Cup and Bag D. Cup or Bag

A. Once a choice is made, the problem of scarcity is solved. Which of the following statements about scarcity is true? B. A good is scarce if not everyone has it. C. Scarcity means unlimited human wants. D. Both rich people and poor people face the problem of scarcity. Answer: D

Which of the following are opportunity costs of attending school? (1) Poor examination results (2) Income forgone (3) School fees (4) Expenditure on dinners Answer: C. (2) and (3) only A. (1) and (4) only B. (1) and (3) only C. (2) and (3) only D. (2) and (4) only