Scarcity, Choice, and Opportunity Cost
Learning Objective
I can explain how scarcity, choice, and opportunity cost affect what we make and buy.
Key Concepts
When resources are limited and cannot satisfy all wants, it is called scarcity, which forces people to make choices.
Opportunity cost is the next best thing that is given up when making a choice.
Because land is scarce, the school board had to choose between a larger playground and more parking space.
Practice Questions
This lesson includes 3 practice questions to reinforce learning.
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1. The school board had to decide between a playground and a parking lot. Why couldn't they have both?
2. What does 'opportunity cost' mean in the story about the playground?
3. The students wanted swings, slides, climbing ropes, and a basketball hoop for the playground, but they couldn't have everything. This is an example of:
Educational Video
Scarcity and Opportunity Cost | Economics Explained
Federal Reserve Bank of St. Louis