Scarcity Choice Opportunity Cost

Unlimited Wants Limited Resources ScarcityChoice Opportunity Cost

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

Opportunity Cost 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.

Opportunity Cost: Go for picnic. Brother (go on picnic) I think the table of yesterday is very bad. No change Although the value of playing table tennis decrease, it is not the opportunity cost, then the opportunity cost is no change. But the food was very tasty, we still enjoy it very much, we were happy yesterday. The value of go on picnic increase, then the opportunity cost increase. Yesterday, there were many rubbish in the countryside. The value of go on picnic decrease, then the opportunity cost decrease. 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. Friend (play table tennis) Case 1

She have $100. Unavailable options: Available options: Dress $122 Jeans $150Skirt $50T-shirt $80Coat $100 My first priority is skirt, Dress,Jeans Coat, Skirt,T-shirt the second priority is coat, the third priority is T-shirt. 321 coat When I choose coat, skirt My opportunity cost is skirt. skirt When I choose skirt, coat My opportunity cost is coat. T-shirt When I choose T-shirt, skirt My opportunity cost is skirt. Case 2

Scarcity arises is because we do not want more of it. For example, sea water. Scarcity is a relative concept. It depends on the quantity available relative to wants. Do you know? Scarcity arises because the supply of resources or goods is fixed in supply, am I right? NO! 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 Gifts51520CupBagCamera Mary has accumulated 20 Coupons. What is the opportunity cost to her if she uses them to exchange for one camera? A.Cup B. Bag C. Cup and Bag D. Cup or Bag

Which of the following statements about scarcity is true? A. Once a choice is made, the problem of scarcity is solved. 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 A. (1) and (4) only B. (1) and (3) only C. (2) and (3) only D. (2) and (4) only Answer: C. (2) and (3) only