Scarcity and Choice

The most desirable alternative given up as the result of a decision is called _____________.

• Choice
• Opportunity Cost

Economics is the study of how people seek to satisfy their needs and wants by making choices.

• True
• False

________means that we have limited quantities of resources to meet our unlimited wants.

• Shortage
• Scarcity
• Recession
• Simplify

Sinéad is trying to decide between a phone for 300 and an iPod 350. She decides to buy the phone. What is her opportunity cost?

• 350
• 50
• 300
• 100

The financial cost of something is...

• when we decide to use our money for one particular purpose, we lose the chance (opportunity) to do something else with that money
• the price of the goods we choose to buy
• the factors/inputs used to produce goods or services

Which of the following can be scarce? Select all that apply.

• money

• food

• water

• trees

True/False: Human wants will always exceed available resources.

• TRUE

• FALSE

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

• Choices

• Opportunities

• Houses

• Desires

Which one of the following is an opportunity cost?

• You stay out late and your parents ground you.

• You run a red light and you get a ticket.

• You choose to give up math to study for history.

• In a softball game, you miss the ball and strike out.

In economics a decision is free if:

• There is no money involved.

• There are no products involved.

• There is no exchange with another person.

• A decision is never free. There is usually an alternative which results in an opportunity cost. Not free.