WQ18: Scarcity & Opportunity Cost

Limited Resources + Unlimited Wants =

• Scarcity

• Productivity

• Opportunity Cost

• Efficiency

What is the most basic problem of economics?

• scarcity

• productivity

• money

• resources

Opportunity cost is your ____.

• first choice

• second best alternative

• trade-off of a choice

• allocation of a good or service

Opportunity costs arise because of scarcity.

• True

• False

Suppose your best friend takes you to a concert for your birthday and you have a much better time than you would have had doing anything else. There is still an opportunity cost, even though they will not let you pay for anything.

• True

• False

All the things we sacrifice to obtain another is known as opportunity costs.

• True

• False

In two hours, John can write two essays or construct one presentation. His opportunity cost of constructing one presentation is:

• feeding the dog

• one essay

• two essays

• calculus homework

Scarcity forces us to allocate resources along what question(s)?

• What to produce?

• How to produce?

• For whom to produce?

• Where to produce?

Scarcity is good because it forces the use of the smallest amount of resources to produce the greatest amount of output, or _______.

• allocation

• efficiency

• specialization

• division of labor

What is one way we can fix the problem of scarcity?

• ability to pay

• lottery

• rationing

• division of labor