ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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trade offs
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scarcity
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choice
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incentive
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Detailed explanation-1: -There is always scarcity, because human wants are unlimited. This then brings use to a third important idea: Because of scarcity we MUST MAKE CHOICES. Some economists call this the “economizing problem".
Detailed explanation-2: -To Exemplify, a farmer has 10 acres of land he has a choice to either grow wheat or cotton on it. The limited land is a scarcity of the resource. The alternative crops wheat and cotton show how we have choices.
Detailed explanation-3: -Scarcity is one of the key concepts of economics. It means that the demand for a good or service is greater than the availability of the good or service. Therefore, scarcity can limit the choices available to the consumers who ultimately make up the economy.
Detailed explanation-4: -A resource is scarce when its demand by various economic entities exceeds the available amount when the resource price is zero. Moreover, the concept of scarcity is vital in economics because it forces individuals to make choices as they cannot satisfy all their desires in the market.