Notes #3 Scarcity and Opportunity Cost Period 4

What is meant by opportunity cost?

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

What does scarcity mean?

unlimited needs and wants of humans combined with limited resources

What kinds of choices do consumers need to make?

Consumers: What to buy, trade, or use?

What are some benefits of a college education and what are some of the opportunity costs 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 horizons (mindset) widened Opportunity Costs: Missed: Earning money from a job Time with friends Getting job experience and skills Spent $40,000.

What kinds of choices do businesses need to make?

Businesses: What resources to use and what products to produce?

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

People have UNLIMITED wants and needs, but there are a LIMITED amount of resources to meet their demands.

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

We have to make choices or tradeoffs.

What two things does each economic choice involve?

benefits v. opportunity costs

What is unlimited or endless?

needs and wants

What is limited?

our resources

What is the main economic problem?

scarcity