Scarcity

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Scarcity
Choice
Opportunity Cost
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Relationship
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Scarcity
Scarcity is -a universal problem. It happens
everywhere, whether in a rich or poor
country. -a relative concept. Whenever we want
more that we have, Scarcity exists.
Goods are scarce if 1) we want to have more of
it, 2) its availability cannot satisfy every
want for it.
Example of scarce goods Money, happy, health,
friendship,etc.
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To make a choice
We have to make choices as we cannot satisfy all
wants with limited resources.
1) Compare the values of different options
2) the highest valued option is your choice
3) the highest valued option forgone is your cost.
P.S. No choice no cost
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(No Transcript)
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Remarks
1. Cost arises from making choices.
2. Cost changes only if the highest-valued
option forgone changes.
3. A change in cost is not equal to a change in
value.
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Case 1
Friend (play table tennis)
Brother (go on picnic)
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Sale
She have 100.
Case 2
When I choose skirt, My opportunity cost is coat.
My first priority is skirt,
Unavailable options
Dress,
Jeans
When I choose coat, My opportunity cost is skirt.
the second priority is coat,
Available options
When I choose T-shirt, My opportunity cost is
skirt.
the third priority is T-shirt.
Coat,
Skirt,
T-shirt
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Scarcity arises because the supply of resources
or goods is fixed in supply, am I right?

Scarcity arises is because we do not
want more of it. For example, sea water.
Scarcity is a relative concept. It depends on
the quantity available relative to wants.
Do you know?
NO! NO! NO! YOU ARE WRONG!
Yes!
Case 3
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Questions Answers
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Q1
Miss Cheng could spend two hours at a concert
or tutoring a student at 70 per hour. She could
use the time on painting instead and earn a
total of 170. If the price of the concert
ticket is 250, what is the opportunity cost of
her choice of going to the concert?
A. 410
B. 420
C. 430
D 440
Answer
C. 430
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Q2
Mary has accumulated 20 Coupons. What is the
opportunity cost to her if she uses them to
exchange for one camera?
No. of coupons Gifts
5 15 20 Cup Bag Camera
A.Cup
B. Bag
C. Cup and Bag
D. Cup or Bag
Answer
C. Cup and Bag
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Q3
A. Once a choice is made, the problem of
scarcity is solved.
B. A good is scarce if not everyone has it.
Which of the following statements about scarcity
is true?
C. Scarcity means unlimited human wants.
D. Both rich people and poor people face the
problem of scarcity.
Answer
D
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Q4
A. (1) and (4) only
B. (1) and (3) only
C. (2) and (3) only
D. (2) and (4) only
Answer
C. (2) and (3) only
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Name List
Rebecca Cheng ???
Eva Ip ???
Tobey Wong ???
Ida Yeung ???