Lesson 2: Scarcity and Choice Notes PDF
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This lesson discusses the concept of scarcity and choice in economics. It explains that resources are finite, while needs and wants are infinite, leading to choices and opportunity costs. The lesson also touches on the difference between effective and efficient resource utilization, highlighting the importance of achieving desired goals (effectiveness) through the best possible means (efficiency).
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Notes for use Lesson 2: Scarcity and Choice Unit 1: Fundamentals of Economics Lesson 2: Scarcity and Choice Learning Objective: To understand the concepts of scarcity and choice. Learning Outcomes: To define scarcity. To explain the difference between effective vs. efficient...
Notes for use Lesson 2: Scarcity and Choice Unit 1: Fundamentals of Economics Lesson 2: Scarcity and Choice Learning Objective: To understand the concepts of scarcity and choice. Learning Outcomes: To define scarcity. To explain the difference between effective vs. efficient. To explain the concepts of marginal utility and opportunity cost. To complete problems involving opportunity cost and scarcity. Effective vs. Efficient Economics is always concerned with: The effective use of resources When we consume a certain amount of resources and achieve the desired result The efficient use of resources When we use the bare minimum of resources to achieve the desired result. The economic imperative is to achieve the right goals (effectiveness) in the right way (efficiency) Scarcity Class Discussion: What is Scarcity? Scarcity Concept that our needs and wants are infinite but resources are finite. Because of scarcity, everyday people have to make choices. This is called Marginal Analysis or Opportunity Cost. Marginal Analysis and Opportunity Cost The sum of all that is lost from taking one course of action over another When making economic decisions we must consider not only what we will gain, but also what we will lose. Example of Opportunity Cost You have $2000 and 3 options to spend it: Take a 2 week vacation in Cuba Buy a DVD player and a home-theatre system Finance yourself to spend a summer working in Africa Example of Opportunity Cost Whichever one you choose, you’ll have to do without the other two. The opportunity cost of your vacation is the satisfaction lost from not doing your “next best” alternative. It will also include earnings lost during vacation. Video – Opportunity Cost Task 1. Complete the activities on the opportunity cost worksheet. REVIEW QUIZ Which of the following is NOT an example of scarcity? 1. Households face a scarcity of income 2. Individuals face a scarcity of time 3. Economies face a scarcity of resources 4. The world faces a scarcity of ideas What are the three fundamental questions in economics? 1. What to produce, how to produce it and for whom? 2. Is it necessary, is it right, is it valuable? 3. Who should produce it, what is the right way to produce, and how should we decide? 4. What to produce, how to produce it and who should produce it? What are the three factors of production? (economic resources) Which of the following is NOT an example of a GOOD? 1. Cars 2. Wheat 3. IPhone 4. Schools Which of the following describes a SERVICE? 1. Products made for people 2. Tasks performed for people 3. Tasks performed by people 4. Products that people can buy Which is an example of a CAPITAL resource? 1. An office building 2. Copper 3. Drinking water 4. A car manufacturer Which is an example of a LAND resource? 1. A bar code scanner in a supermarket 2. Trees 3. An office building 4. CD-ROM technology Resources is a term that can be used instead of? 1. Models 2. Consumer goods 3. Factors of production/inputs 4. Services
