Economics: Scarcity & Opportunity Cost Pete Lester

Scarcity Problem of infinite wants & needs but a limited number of resources Something that has a short supply What are some items from our daily lives that are scarce?

Production the act of creating, cultivating, or manufacturing a product the goods actual & services – technology, clothing, food

Consumption the using up of goods and services who is actually buying the products for use – students, executives, corporations, governments

Substitutes a good or service that can be easily replaced by another product w/ similar characteristics What are some other examples of substitutes?

Opportunity Cost The value of the next best alternative. Real cost of an item that includes what must be given up in order to obtain it. “An opportunity cost is an opportunity lost.”