6.2.1 Scarcity and Choice

• Scarcity arises because human wants are unlimited and resources are finite


  True
• Choice is necessary because scarcity forces individuals, businesses, and governments to make decisions about resource allocation


  True
• Opportunity cost is the value of the next best alternative that is chosen

  False
• Scarcity is a fundamental concept in economics that highlights the challenge of making choices about how to allocate resources
• Scarcity arises from unlimited resources and limited human wants

  False
• What is an example of unequal distribution of resources?

  Water scarcity in arid regions
• Needs are essential for survival, while wants are desired but not essential
• What is an example of a producer choice?

  Producing cars or trucks
• Finite resources are an example of a source of scarcity


  True
• Choice is necessary because scarcity requires decisions about how to allocate resources
• Choice is the process of selecting one option from available alternatives when resources are unlimited.

  False
• Match the type of choice with its description:

  Consumer Choices ↔️ Decisions about what to buy

  Producer Choices ↔️ Decisions about production

  Government Choices ↔️ Decisions about resource allocation
• Trade-offs involve giving up one thing in order to gain something else due to unlimited resources.

  False
• What type of trade-off involves allocating public funds between various sectors?

  Government trade-off
• Scarcity refers to the condition where limited resources are insufficient to satisfy unlimited wants and needs
• Needs are essential for survival, while wants enhance comfort or pleasure
• Match the concept with its description:

  Scarcity ↔️ Limited resources versus unlimited wants

  Choice ↔️ Selecting one option from alternatives

  Opportunity Cost ↔️ Value of the next best alternative forgone

  Trade-offs ↔️ Balancing competing objectives
• How does scarcity apply to economic models?

  Resource allocation decisions
• Order the resource types from most to least tangible:

  1️⃣ Capital

  2️⃣ Natural

  3️⃣ Human
• Finite resources, unequal distribution, consumer demand, and production limitations are all sources of scarcity
• Order the concepts from most essential to least essential:

  1️⃣ Needs

  2️⃣ Wants
• Choice occurs because resources are unlimited and wants are finite

  False
• Every choice involves an opportunity cost, which is the value of the next best alternative
• What impact does a lack of needs have on individuals?

  Threat to health or safety
• What is the opportunity cost of a choice?

  Next best alternative forgone
• Individuals, businesses, and governments must make decisions about how to allocate scarce resources due to scarcity
• What is the opportunity cost of allocating a budget to healthcare instead of education?

  Value of education forgone
• Consumer trade-offs involve balancing the purchase of different goods and services within a budget
• Trade-offs highlight the need to weigh the opportunity costs and benefits of each option when making decisions.


  True
• Scarcity refers to the condition where limited resources are insufficient to satisfy unlimited wants
• Match the source of scarcity with its example:

  Finite Resources ↔️ Limited supply of fossil fuels

  Unequal Distribution ↔️ Water scarcity in developing regions

  Consumer Demand ↔️ Shortage of latest smartphones

  Production Limitations ↔️ Shortage of skilled workers
• What is an example of scarcity caused by finite resources?

  Limited supply of fossil fuels
• Scarcity can arise from unequal distribution of resources across regions.


  True
• A shortage of skilled workers in certain industries is an example of scarcity caused by production limitations
• What is the opportunity cost of buying a car instead of investing in a home?

  Value of investing in home
• Understanding opportunity costs helps decision-makers prioritize resources effectively.


  True
• Scarcity is the condition where limited resources cannot satisfy unlimited wants and needs
• What is an example of scarcity in arid regions?

  Fresh water availability
• Order the sources of scarcity from most fundamental to specific examples:

  1️⃣ Finite Resources

  2️⃣ Unequal Distribution

  3️⃣ Consumer Demand

  4️⃣ Production Limitations
• The unequal distribution of resources across regions leads to scarcity, such as water in arid