Econs
hi
Opportunity Cost
HElLo
ARRO
Foregoing higher education and therefore a better chance of earning a higher income
Opportunity cost is the cost of any action or decision, measured in terms of the highest valued (or next best) alternative forgone
It represents the real cost of making a choice
Choice
For whom to produce?
How will the output of goods and services be distributed?
Teenagers and Elderly
How to produce?
What resources are going to be used, an in what quantities? What techniques of production are going to be used to produce these goods and services?
Refridgerator
1
Different Flavouring Essence
500 ml of each essence
Sugar
5kg
Milk
10 litre
Ice cream maker
3 of them
What to produce?
What types of goods and services are going to be produced, and in what quantities, since there are insufficient resources to produce all that is desired?
Yoghurt ice cream
20kg per day
To allocate scarce resources so as to maximise the satisfaction of the most wants
Scarcity
I can only go to either university or to set up an ice cream stall.
Definition
scarcity exists when there is an excess of human wants over what can actually be produced to fufill these wants.
