What is relationship between scarcity choice and opportunity cost

Describe The Relationship Between Scarcity, Choice And Opportunity Cost? - Blurtit

what is relationship between scarcity choice and opportunity cost

Explain how PPC relates to scarcity, choice and opportunity cost. Choice is reflected by the need for society to choose among the series of. Answer (1 of 6): The basic economic problem is scarcity that is we have limited resources and our wants are Difference between opportunity cost and trade off. Economists define opportunity cost as the next best alternative or the highest students with a strong understanding of opportunity cost, scarcity, and choice is can be downloaded at mephistolessiveur.info External Link.

Suppose there are only two goods produced in the economy. The PPC shows all the different combinations of the two goods that can be produced in the economy when resources are fully and efficiently employed, given the state of the technology [definition of PPC]. Overview on how PPC reflects scarcity, choice and opportunity cost The side diagram is a production possibility curve.

  • Using the PPC, explain the concepts of scarcity, choice and opportunity cost. [10]
  • Scarcity, choice and opportunity cost

The PPC is a series of points rather than a single point. Explanation and elaboration on how the PPC reflect scarcity An increase in the production capacity in the economy will lead to an outward shift in the PPC resulting in a decrease in scarcity and vice versa [point].

#3,(Season 2 )Scarcity and choice(the basic problem)

When the PPC shifts outwards, some of the previously unattainable points will become attainable. The production capacity in the economy could increase due to an increase in the quantity or the quality of factors of production [explanation and elaboration]. Explanation on how the PPC reflect choice A change in the tastes and preferences of society will lead to a movement along the PPC which reflects a change in choice [point]. The tastes and preferences of society may change due to technological advancements [explanation and elaboration].

Describe The Relationship Between Scarcity, Choice And Opportunity Cost?

For instance, the invention of the smartphone and tablet computing has led to a change in the tastes and preferences of society towards electronic publications.

They can discuss how to identify the opportunity cost associated with buying the cheaper gas. The connections with personal finance issues are some of the most important contexts in which students can use opportunity cost. Teaching middle and high school students to budget and make realistic spending decisions are important. Doing so also lends itself well to discussions of opportunity cost and choice. Most household budgets require individuals and the household to make tradeoffs between different things on which to spend household income.

With sound decision-making skills that are well grounded in the concept of opportunity cost, our young people can be expected to make more thoughtful budget decisions as they go off to college and the world of work. Here are some additional resources related to opportunity cost, scarcity, and choice: The lesson can be downloaded at www.

what is relationship between scarcity choice and opportunity cost

The lesson can be found online at www. The answers are then summed for each alternative and a decision is made. In later grades, a numbered scale e. After summing the results, the students indicate the choice they would make and then identify the opportunity cost of their decision.

P — Identify the problem or decision that needs to be made. The consumers choose the product they like and thus their choices direct the types of production that should be carried out.

Scarcity, choice and opportunity cost

The firms will follow this because this is the most profit maximizing combination. Sometimes the government too can decide what to produce.

what is relationship between scarcity choice and opportunity cost

The government may decide to produce an essential good or service which everyone ought to have. This question will be answered by those supplying the goods and services.

Scarcity, choice, and opportunity costs

If the supplier is a private firm, it will seek to use the method which will give the maximum profit. For example, production can be done using labour intensive method and capital intensive method. The private firm will decide on the method which will give lowest average costs. If the government is the supplier, it may try to use the method which promotes welfare of the society rather than maximising the profit.

For whom to produce? For whom to produce will also depend on the suppliers government and private firms. The consumers are the target of production, but the kind of consumers the firm or the government wants to target is the question. The government usually produces for the general public where as the private firms can seek to maximize profit by producing for the high and rich level customers as well as the general public.