Scarcity and Opportunity Cost

What is opportunity cost?

• the value of the next best option that is not selected when a choice is made.

• there is not enough of it.

• things people make to earn money.

• actions people do to earn money.

Jaleigh is going shopping with her Aunt and has $20. She wants to buy a pair of jeans and a shirt. The jeans are $15 and the shirt is $20. Jaleigh decides to buy the jeans, what is her opportunity cost?

• jeans

• shirt

What is opportunity cost?

• your choice
• what you give up to make a choice

What is scarcity? 

• Having too many resources 
• Not  having enough resources 

A popular bakery has only a few ingredients left to make their products.  They could bake muffins or cookies, but they can’t make both.  The bakers decide to make cookies for their customers.  What is the opportunity cost of their decision?

• muffins 
• cookies 

The opportunity cost of a good is

• its price in dollars and cents.

• the alternative goods forgone.

• the price of alternative goods foregone.

• none of the other options

Economics is the study of how

• gov't allocates scare resources to satisfy people's unlimited wants.
• gov't supplies money to businesses to produce goods & services.
• people use their scarce resources to satisfy their unlimited wants.
• businesses supply unlimited goods & services with limited resources.

Scarcity arises because all societies have

• limited productive resources to satisfy unlimited wants
• unlimited productive resources to satisfy limited wants
• limited needs and unlimited wants
• unlimited needs and limited wants

The factors of production is / are ___________ needed to produce goods and services.

• things
• resources
• energy
• people

Identify the factor of production. 

• land
• labor
• capital
• entrepreneurship