AP Classroom 1.1 Video 1

What is the definition of scarcity in economics?

Scarcity refers to the limited availability of resources in relation to unlimited needs and wants.

What does scarcity force individuals and societies to do?

Scarcity forces individuals and societies to make choices.

How does scarcity lead to trade-offs?

Scarcity necessitates trade-offs because if resources were unlimited, there would be no competing needs and choices to make.

What is the relationship between resources, needs, and wants?

The relationship is that resources are limited while needs and wants are unlimited.

Give an example of scarcity from the amusement park scenario.

Limited seating capacity for a popular ride and limited amount of time available create scarcity.

What is the focus of economics as a behavioral science?

Economics focuses on how scarce resources are allocated among unlimited needs, wants, and desires.

What are the two levels at which economics studies decisions?

Economics studies decisions at the individual (micro) level and the aggregate (macro) level.

What can be concluded about the world we live in regarding scarcity?

We live in a world of scarcity where resources are limited and decisions must be made for their allocation.