Basic Economic Structures<br />EPF1a. Scarcity & Opportunity Costs<br />
What is scarcity?<br />Essential question:<br />2<br />EPF.1a scarcity & opportunity costs<br />
What is scarcity?<br />The condition of NOT being able to have all the goods and services one wants.<br />It exists becaus...
Why do choices result in opportunity costs?<br />Essential question:<br />4<br />EPF.1a scarcity & opportunity costs<br />
Why do choices result in opportunity costs?<br />All choices have opportunity costs<br />The opportunity value of a choice...
How do consumers, businesses and gov’t decision makers face scarcity of resources?<br />Essential question:<br />6<br />EP...
How do we face scarcity of resources?<br />Resources are scarce; <br />Therefore, consumers, businesses, and gov’t decisio...
Consumers face scarcity<br />Ex. a consumer with 2 hours of free time cannot go ice skating for 2 hours and see a movie du...
Businesses face scarcity<br />Ex. Suppose a grocer is deciding whether to add a café or a pharmacy. It only has space for ...
Governments face scarcity<br />Ex. Money spent on roads cannot be spent on education.<br />10<br />EPF.1a scarcity & oppor...
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Epf1a scarcity and opportunity costs

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Epf1a scarcity and opportunity costs

  1. 1. Basic Economic Structures<br />EPF1a. Scarcity & Opportunity Costs<br />
  2. 2. What is scarcity?<br />Essential question:<br />2<br />EPF.1a scarcity & opportunity costs<br />
  3. 3. What is scarcity?<br />The condition of NOT being able to have all the goods and services one wants.<br />It exists because human wants for goods and services exceed the quantity of goods and services that can be produced from all available resources<br />3<br />EPF.1a scarcity & opportunity costs<br />
  4. 4. Why do choices result in opportunity costs?<br />Essential question:<br />4<br />EPF.1a scarcity & opportunity costs<br />
  5. 5. Why do choices result in opportunity costs?<br />All choices have opportunity costs<br />The opportunity value of a choice is the value of the best alternative given up.<br />Choices involve trade offs - weighing the expected value of one opportunity against the expected value of its best alternative.<br />5<br />EPF.1a scarcity & opportunity costs<br />
  6. 6. How do consumers, businesses and gov’t decision makers face scarcity of resources?<br />Essential question:<br />6<br />EPF.1a scarcity & opportunity costs<br />
  7. 7. How do we face scarcity of resources?<br />Resources are scarce; <br />Therefore, consumers, businesses, and gov’t decision makers are forced to make choices about how to use resources<br />7<br />EPF.1a scarcity & opportunity costs<br />
  8. 8. Consumers face scarcity<br />Ex. a consumer with 2 hours of free time cannot go ice skating for 2 hours and see a movie during the same 2 hours.<br />Whatever choice is made, the alternative given up is the opportunity cost.<br />8<br />EPF.1a scarcity & opportunity costs<br />
  9. 9. Businesses face scarcity<br />Ex. Suppose a grocer is deciding whether to add a café or a pharmacy. It only has space for one.<br />It makes a choice, the not selected choice is the opportunity cost.<br />9<br />EPF.1a scarcity & opportunity costs<br />
  10. 10. Governments face scarcity<br />Ex. Money spent on roads cannot be spent on education.<br />10<br />EPF.1a scarcity & opportunity costs<br />

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