ECONOMICS LEP 1: OPPORTUNITY COST AND SCARCITY

Which description is most correct about opportunity cost (OC)

• impacts small businesses more often than large businesses

• can be avoided if you have enough money

• is inherent in all decisions/choices

• can only be expressed in monetary terms

__________ is the fundamental, universal, and perpetual economic problem that no one is immune to.

• price floors/price ceilings

• Scarcity

• Shortage

• the study of microeconomics

The difference between scarcity and shortage is

• scarcity is a natural & re-occurring condition; shortage is a man-made condition

• shortage only happens with new products

• shortage is a natural & re-occurring condition; scarcity is a man-made condition

• shortage is the fundamental, universal economic problem

Opportunity cost (OC) can be described as

• your number 1 tradeoff when making a choice

• the number 2 alternative in your list of choices

• is the next best choice and one you didn't choose

• all of these answers are examples of opportunity cost (OC)

George earns a $250 bonus at his job for increasing his output by an additional 50% two weeks in a row. He makes a list of what he wants to buy with his bonus: 1: the latest model of Adidas athletic shoes; 2: Air Pods; 3: a new coat. He buys Adidas. What is his opportunity cost?

• the Air Pods

• the shoes

• the coat

• the cash

Economics can be described as the study of

• Money

• Choices

• graphing

• price ceilings and price floors

The condition of scarcity can be described as one that

• afflicts only poor people and nations

• exists when our unlimited needs/wants exceed our limited resources

• exists when our limited resources exceed our unlimited needs/wants

• only applies to luxury items

Scarcity occurs because of the

• Limited Resources

• Unlimited Needs

• Abundance of Resources

• Equilibrium

True or False: Scarcity is a fundamental concept in economics because resources are limited while human wants are unlimited.

• True

• False

What is scarcity in economics?

• The abundance of resources

• The unlimited availability of goods

• The limited availability of resources

• The equilibrium of supply and demand