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Day 4 - Scarcity
Day 4 - Scarcity
you choose?
Watch
movies
Sleepin
g
Burger
Pizza
Cupcak
es
Ice
Cream
Captain
America
Iron
Man
Why is there
a need to
choose?
Scarcity
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
College
Life
Social
life
Enoug
h
sleep
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)