Scarcity

Which of the following is an example of a need?

• A new smartphone

• Clean drinking water

• Designer clothes

• A luxury car

Which of the following is an example of a want?

• Food

• Shelter

• Medical care

• A vacation

Why is it important for us to understand scarcity?

• To ignore the concept of limited resources

• To make informed decisions and prioritize needs

• To ensure we have unlimited resources

• To avoid making any decisions

What is the definition of opportunity cost?

• The actual cost of an item or service.

• The potential benefits that an individual, investor, or business misses out on when choosing one alternative over another.

• The total revenue generated by a business.

• The amount of money saved by choosing a cheaper alternative.

Because of scarcity, people are forced to make _________ about how to use resources.

• Choices

• Opportunities

• Houses

• Desires

A trade-off is

• a purchase in a marketplace.

• an alternative that we sacrifice when we make a decision.

• any good or service a consumer needs.

• a factor of production.

Amber was shopping at the mall. She had $80 to spend. She found three items she liked: $75 for a pair of shoes, $70 for a jacket, and $62 for a dress. After shopping for a couple hours, she decided to borrow a pair of shoes from her cousin and to buy the jacket for $70. What was her opportunity cost?

• Shoes

• Jacket

• Dress

• Purse

A company can either invest in employee training programs or upgrade its office equipment. They choose to invest in training programs. What is the opportunity cost of this decision?

• The improved skills of employees

• The upgraded office equipment

• The cost of the training programs

• The time spent on training

Emily has $200 to spend. She can either buy a new tablet or save the money for a future vacation. She decides to buy the tablet. What is the opportunity cost of her decision?

• The new tablet

• The future vacation

• The $200

• The time spent using the tablet

Who is affected by the condition of scarcity?

• The rich

• Large economies

• All societies

• Producers (ie: businesses)