Scarcity and Opportunity Cost

What is meant by opportunity cost?

The missed opportunity or what you gave up for making the choice or purchase.

What two things does each economic choice involve?

1. Benefit 2. OPPORTUNITY COST

What are some benefits of a college education and what are some of the Opportunity cost of a college education?

Benefit: earned college degree - - required for many good jobs, will make more money over lifetime, more valuable to employers for complicated jobs,type of job more interesting, one's horizon (mindset) widened Opportunity cost: Earning money from a job, time with friends, getting job experience and skills, spent $40,000.

Why can't all of people's needs and wants be satisfied?

Limited resources

2. What does scarcity mean?

Not enough resources- - because we have unlimited want to but limited resources

What is unlimited or endless?

Our wants

What is limited?

Resources

What is the main economic problem?

Scarcity

Because of the scarcity of resources, what do we need to make?

We need to make choices (trade offs)

What kinds of choices do businesses need to make?

What resources to use, and what products to produce.

What kinds of choices do consumers need to make?

What to buy, trade, or use