Scarcity and Opportunity Cost

All of the following are examples of opportunity cost EXCEPT:

• tuition fees paid to a university

• the income which could have been earned by a college student had he or she worked full time instead of going to college

• the building which could have been built with the construction materials and labor used to build a new university library

• the leisure time sacrificed to study for an exam

_____________ means that we do not have enough of a good or service to meet all of the demand.

• opportunity cost

• scarcity

• wants

• resources

Scarcity is only a problem for poor people.

• True

• False

Why is scarcity a problem for everyone?

Emily is deciding what to do after high school. Right now her two options are: go to college or enter the workforce/get a job. She can only choose one. Emily decides to get a job. Which of the following is the opportunity cost of her decision?

• money

• job

• time

• college

Pretend you were living in New Orleans, Louisiana, while Hurricane Katrina hit. Name at least 3 items that would have been scarce after the hurricane came through.

Which of the following seems to represent the law of diminishing marginal utility? Check all that apply.

• Ken enjoys his 10th can of Pepsi more than his 1st.

• Morris the Cat likes catnip more and more the longer he plays with it.

• Howard has a decreasing desire for more wealth the richer he becomes.

• The more pieces of gum Sam puts in his mouth, the less satisfaction he gets from chewing it.

Which type of resource does WATER FROM A STREAM FOR IRRIGATION represent?

• human resource

• capital resource

• natural resource

What type of resource does a knife cutting meat in a butcher shop represent?

• human resource

• natural resource

• capital resource

Which type of resource does a painter painting your house represent?

• capital resource

• human resource

• natural resource