SCARCITY SITUATION
You have $20. You want to buy lunch for $12 and a new shirt for $18. You cannot afford both.
Question: What economic concept explains why you must choose?
Answer: Scarcity
You spend Saturday studying instead of going to the beach.
Question: What is the trade-off?
Answer: Studying instead of going to the beach—or enjoying the beach instead of studying.
You choose to spend $40 on sneakers instead of a video game.
Question: What is the opportunity cost?
Answer: The video game.
A student has $100 and wants to buy five different things but can only afford two.
Question: What economic problem is the student experiencing?
Answer: Scarcity.
Nike drops the sneakers you’ve been waiting for. They cost $1,000.You have exactly $1,000 in your account.You buy them.
Question: What’s your opportunity cost?
BONUS: What if your rent is due tomorrow?
Answer: Whatever you would have used that $1,000 for next
A school has only 10 computers available, but 30 students need them at the same time.
Question: What is scarce: the students, the computers, or both? Explain.
Answer: The computers. There aren’t enough computers to satisfy everyone’s wants at that moment
A student chooses to work a 5-hour shift instead of attending a free concert.
Question: What is being traded off?
Answer: Income from working
You can work Saturday and earn $120, or stay home and play video games. You choose to stay home.
Question: What is your opportunity cost?
Answer: The $120 you could have earned.
You spend $500 on a vacation instead of saving the money.
Question: What is the trade-off?
Answer: Enjoying the vacation
There’s one slice of pizza left and five people want it.
Question: What’s scarce?
A. Pizza
B. People’s hunger
C. Money
D. Nothing
Answer: A — Pizza
A city has enough money to repair either 10 miles of roads OR replace an old bridge. It cannot do both.
Question: What creates the need for this choice?
Answer: Scarcity of resources.
The government spends $50 million on a new stadium instead of funding additional school programs.
Question: What is the trade-off?
Answer: The benefits of the stadium
You have $30 and choose to buy a concert ticket. Your next-best alternative was buying a new video game for $25.
Question: What is the opportunity cost?
Answer: The $25 video game.
Your school has one empty classroom. The principal can use it as a study hall OR a gaming room.
Question: If the principal chooses study hall, what is the opportunity cost?
Answer: The gaming room
You have $60.You can get: A fresh set of nails — $60
Your favorite restaurant food — $60
You choose the nails.
Question: What’s the trade-off?
Giving up the meal to get your nails done.
A student says, “If something is scarce, it must be rare.”
Question: Is the student correct? Why or why not?
Answer: No. Scarcity means resources are limited relative to people’s wants. Something doesn’t have to be rare to be scarce.
You have two hours before an exam. You can study Economics for two hours OR study Economics for one hour and work out for one hour.
Question: Is there a trade-off in BOTH choices?
Answer: Yes. Time is limited, so choosing how to use it means giving up another possible use
You have two job offers:
You choose Job A.
Question: Can we automatically say your opportunity cost is $15/hour?
Answer: No. You must consider the value of the entire next-best alternative, including the free meals
Two students have the same amount of money.
Student A spends $50 on food.
Student B spends $50 on a video game.
Question: Do they necessarily have the same opportunity cost?
Answer: No. Opportunity cost depends on what each person’s next-best alternative was.
What college did Ms. J attend?
The university of South Carolina
Air is necessary for human life, yet economists generally don’t treat ordinary air as scarce. Why?
Answer: there is enough freely available air to satisfy people’s wants
A student says, “I made a choice, so there must be an opportunity cost.”
Question: Is that always true?
Answer: Yes. Every choice involves giving up at least one alternative. The opportunity cost is the next-best alternative given up.
You decide to spend 4 hours studying instead of working. Your job pays $17/hour.
Question: What is the monetary opportunity cost of studying?
monetary definition: The meaning of MONETARY is of or relating to money
Answer:
4 × $17 = $68
But here’s the trick: $68 is only the monetary opportunity cost. The total opportunity cost could include other benefits you gave up by not working.
What is Ms. J‘s dog name? And how do you spell his name?
S K A R R
Your crush texts:
“Come over”
But you have a test tomorrow.
You can either: Go see your crush or Study for the test
Question: What’s the trade-off?
The benefits of seeing your crush