Scarcity, Choice, And Opportunity Cost

Question 1

Define scarcity

Answer 1

Scarcity refers to a situation of having limited supply of resources to meet the needs of individuals, organizations and government.

Question 2

What is choice in economics

Answer 2

In economics, choice refers to the decision-making process where individuals, businesses, or governments select among various alternatives due to limited resources.

Question 3

Define opportunity cost

Answer 3

This refers to the alternative foregone when choice is made. It is what an individual loses in real value in relation to what he or she gains.

Question 4

What is the importance of choice

Answer 4

Importance of the concept of choice
•It is used to determine what to produce.
•It is used to determine when to produce
•It is used to determine for whom to produce.
•Resources are scarce, only important needs must be supplied.
•Also determines how to produce goods and services in the economy.