SCARCITY AND CHOICE NOTES

Opportunity cost

________: The most desirable alternative given UP as a result of a decision (result of the decision)

Goods

________ and services are scarce because they are all made from resource supplies.

Human

________: skills and knowledge gained by a worker through education and experience.

Physical

________: all human made goods that are used to produce other goods and services (Capital goods)

natural resources

Land: ________ used to make goods and services.

Scarcity

________ means that everyone cant have what they want or need.

Shortages

________: occur when producers will not or can not offer goods or services at current prices.

Capital

________: any human made resource that is used to create other goods and services.

benefit analysis

Cost ________ (CBA): A process that involves analyzing what decisions to make and which to give up.

Shortages

occur when producers will not or cannot offer goods or services at current prices

Examples

holidays, wars, droughts

No cero risk sum

There's always a risk, always something you loose, cant have it all

Trade-offs

alternative that we sacrifice when we make a decision (scenario)

Opportunity cost

The most desirable alternative given UP as a result of a decision (result of the decision)

Benefits

Positive results produced by the choice made, including the return

Costs

The equivalence of a monetary value

Cost benefit analysis (CBA)

A process that involves analyzing what decisions to make and which to give up

Land

natural resources used to make goods and services

Capital

any human made resource that is used to create other goods and services

Physical

all human made goods that are used to produce other goods and services (Capital goods)

Human

skills and knowledge gained by a worker through education and experience