Economic Concepts Worksheet

Concept

Application of Concept from Personal Experience

Reference to Concept in Reading

Scarcity means that people want more of something that is in limited supply. Scarcity requires Choice, decision-makers must choose which choice will suffice and which choice will not.

When we choose more of one thing, scarcity demands that we take less of something else.

Scarcity and choice involves people with unlimited wants. We may have a nice house, big screen TV's, new cars and even a boat but we still want more. We want new carpet, new pets and sometimes, even different kids. Our kids want everything whether they need it or not and my husband wants to travel more. Wanting that something else is unlimited wants. The problem with this is, we have limited resources which means we can't possibly have it all. Even though we may not have enough time or money for all of our unlimited wants and limited resources, choices must be made.

"Since human and property resources are scarce (limited), it follows that the goods and services we produce must also be limited. Scarcity limits our options and necessitates that we make choices. Because we "can't have it all," we must decide what we will have, and what we must forgo" (McConnell & Brue, p. 3).

When there is scarcity and choice, there are Opportunity cost and

the cost of any choice is the option or options that a person gives up by analyzing the cost of the alternative which does not have to be monetary and must be given up when choosing a certain action or decision. Normally it is thought, the alternative is the "next best"...