Economics: Opportunity Cost and Scarcity

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What is opportunity cost?

Back

The loss of the next best alternative when making a decision.

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What are needs in economics?

Back

Essential requirements such as shelter or food.

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What are wants in economics?

Back

Desires that are not essential, even if consumers consider them essential, e.g., Nike trainers.

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What is scarcity?

Back

The basic economic problem that arises because resources are limited.

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What are the factors of production?

Back

Land, labour, capital, and enterprise.

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What does opportunity cost represent in consumer choices?

Back

The loss of the next best alternative when a consumer makes a purchase.

Front

Give an example of opportunity cost in consumer behavior.

Back

When a consumer chooses to purchase a new phone, they may be unable to purchase new jeans.

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Give an example of opportunity cost in production decisions.

Back

When a producer allocates all resources to producing electric vehicles, they may be unable to produce petrol vehicles.

Front

Give an example of opportunity cost in government decisions.

Back

When a government provides free school meals, they may be unable to fund some rural libraries.