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Day 4 - Scarcity

This document discusses key concepts related to scarcity, choice, and tradeoffs. It defines scarcity as limited resources relative to unlimited wants and needs, while shortage refers specifically to current demand exceeding supply. Choice involves selecting between alternatives, with tradeoffs meaning giving up one thing to get more of another. Opportunity cost is the best alternative forgone when making a choice. The production possibilities frontier (PPF) graphically shows the combinations of two goods an economy can produce with limited resources, and how more of one requires less of the other. The document provides examples of making choices between alternatives like social life vs. grades or dating vs. being single. It includes a PPF table to graph and discuss the opportunity cost of different combinations

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happymabee
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45 views23 pages

Day 4 - Scarcity

This document discusses key concepts related to scarcity, choice, and tradeoffs. It defines scarcity as limited resources relative to unlimited wants and needs, while shortage refers specifically to current demand exceeding supply. Choice involves selecting between alternatives, with tradeoffs meaning giving up one thing to get more of another. Opportunity cost is the best alternative forgone when making a choice. The production possibilities frontier (PPF) graphically shows the combinations of two goods an economy can produce with limited resources, and how more of one requires less of the other. The document provides examples of making choices between alternatives like social life vs. grades or dating vs. being single. It includes a PPF table to graph and discuss the opportunity cost of different combinations

Uploaded by

happymabee
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 23

Which would

you choose?

Watch
movies

Sleepin
g

Burger

Pizza

Cupcak
es

Ice
Cream

Captain
America

Iron
Man

Why is there
a need to
choose?

Scarcity

Why do we need to make


choices?

Objectives:
o Differentiate scarcity from
shortage
o Explain the relationship among
the following terms: scarcity,
choice, trade-off, opportunity cost
and production possibilities
frontier
o Graph given data for the
production possibilities frontier.

1.

Scarcity vs.
Shortage
Arent they the same?

Scarcity
A condition
wherein
resources are
limited because
needs and
wants are
unlimited.

Shortage
A condition
wherein current
supply does not
meet current
demand

How can
we make
wise and
ethical
choices?

Choice
The power to select or
decide.

Trade-of
The act of making
a choice, which
results in having
less of one good in
order to get more
of something else

Opportunity
Cost
Real economic
cost of a good,
service or
resource
Best alternative
foregone

You can choose only 2


Good
grade
s

College
Life
Social
life

Enoug
h
sleep

You can choose only 2


Good
lookin
g

Dating
Single

Cool

2.
Scarcity and
making efficient
decisions
Production Possibilities
Frontier

Production
Possibilities
Frontier (PPF)
Shows various
combinations of
output that the
economy can
produce given the
available
resources that
firms can use to
turn such factors
into output

Graphing it
Try graphing the given PPF
table below:
Possibilities Cellphones

Tablets

120

90

15

80

30

50

45

100

Graphing it
Try graphing the given PPF
table below:
Possibili Cellphon
ties
es
A
B
C
D
E

120
90
80
50
0

Tablets

Opportuni
ty Cost for
Cellphone
s

0
15
30
45
100

0
30
40
70
120

Graphing it
Try graphing the given PPF
table below:
Possibiliti
es

Cellphone
s

Tablets

120

90

25

80

45

50

75

100

Opportuni
ty Cost for
Tablets

Graph the
following
scenario
Size 2 (10 pts)

This coming Saturday is the


birthday of your best friend, at the
same time it is also the golden
wedding anniversary of your
grandparents. Your parents are
demanding you to join the
celebration of your grandparents,
your best friend on the other hand
is pressuring you to go to her party.
How will you divide the 9 hours that
you could possibly spend on both or
either of the celebrations? Create

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