Scarcity, choice and opportunity cost LO To apply the concept of opportunity cost to all economic decision –makers To show understanding of how resources are allocated To understand the meaning of primary, secondary and tertiary sectors.

Complete table page 6. The Basic Economic Problem: Resources are scarce – wants are infinite. Therefore looking at best way to allocate scarce resources. What to produce? How to produce it? Who gets it?

Opportunity Cost Having to forego the next best alternative. Scarcity means having to make choices- therefore choices involve an opportunity cost. Q -What is the cost of a hospital? A – Accountant £35 million / Economist the school you have to forego.

Everything has an opportunity cost unless it’s a free good. Zero Priced Goods: Has an opportunity cost Not paid for directly, but indirectly E.g State education (taxes)

http://www. tutor2u. net/blog/index http://www.tutor2u.net/blog/index.php/gcse-economics/comments/demand-and-supply-in-action-fish-and-chips Is this a good deal?? Discuss the opportunity cost of fish and chips v your leisure time – The next best alternative