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    The document discusses key economic concepts including supply and demand, scarcity, and opportunity cost. Supply and demand refers to the relationship between the quantity of a good or service available and the desire of buyers to purchase it. Scarcity means that resources are limited relative to human wants. Opportunity cost is the value of the next best alternative forgone in making a decision. Real-world examples include the relationship between job availability and wages, and how the shortage of PS5 consoles has increased their price due to high demand. Opportunity cost considerations include whether to purchase expensive PS5 consoles to resell or wait for prices to fall, buying an entire stock of avocados despite their high cost, and spending money on a new plow despite

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    The document discusses key economic concepts including supply and demand, scarcity, and opportunity cost. Supply and demand refers to the relationship between the quantity of a good or service available and the desire of buyers to purchase it. Scarcity means that resources are limited relative to human wants. Opportunity cost is the value of the next best alternative forgone in making a decision. Real-world examples include the relationship between job availability and wages, and how the shortage of PS5 consoles has increased their price due to high demand. Opportunity cost considerations include whether to purchase expensive PS5 consoles to resell or wait for prices to fall, buying an entire stock of avocados despite their high cost, and spending money on a new plow despite

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    139 views12 pages

    Example Economic Decisions Slides

    Uploaded by

    api-548952346
    The document discusses key economic concepts including supply and demand, scarcity, and opportunity cost. Supply and demand refers to the relationship between the quantity of a good or service available and the desire of buyers to purchase it. Scarcity means that resources are limited relative to human wants. Opportunity cost is the value of the next best alternative forgone in making a decision. Real-world examples include the relationship between job availability and wages, and how the shortage of PS5 consoles has increased their price due to high demand. Opportunity cost considerations include whether to purchase expensive PS5 consoles to resell or wait for prices to fall, buying an entire stock of avocados despite their high cost, and spending money on a new plow despite

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 12

    Economic

    Decisions
    Supply and Demand
    The relationship between the amount of a product or
    resource (supply) and the desire for buyers to purchase it
    (demand).

    Image Source Image sourc


    Scarcity
    The state of being scarce; shortness of supply.

    Image source
    What are some real-world examples of
    supply and demand in action?
    ● Wages/benefits! If demand is high for labor (workers are needed!) and
    the supply is low (not many people who need jobs), what does that
    mean for wages?
    ○ Higher wages and better benefits! Companies have to attract workers!
    ● What would happen if it was the opposite? There are not many jobs
    available, and tons of people who need jobs?
    PS
    5

    How is the PS5 affected by supply and


    demand right now!?

    Image Source
    Opportunity Cost
    The loss of potential gain from other alternatives when one alternative
    is chosen. Basically, we weigh opportunity cost everytime we make a
    purchase or financial decision.
    PS
    5

    How could the PS5 be related to


    opportunity cost?
    Scenarios
    #1
    The PS5 is in short supply and the demand is super high because of the
    upcoming holiday season. As a result, the wholesale sale price of the PS5 is
    300% higher than the market value. (3 times higher!) You own a local video
    game store and you’re gearing up for the holiday season. Do you buy PS5s
    now, in order to sell them before the holidays, or do you wait till the price
    comes down in the spring? Why?
    #2
    You own a guacamole company and due to drought there is a scarcity of
    avocados this year. Because of this, not only has the value of avocados
    increased, but it is almost impossible to obtain them. Luckily you have been
    presented with an opportunity to buy enough avocados to support 150% of
    your yearly production of guacamole. Even though they will be expensive, do
    you buy this farm’s entire stock of avocados? Why or why not?
    #3
    You have a truck with a plow and during snow storms you plow all of your
    neighbors driveways for some extra income. Unfortunately after the first
    snowstorm of the season the plow on your truck broke. You can buy an new
    plow for your truck, but it would cost you the equivalent of the money you
    would make plowing for three snowstorms. Is this an opportunity cost worth
    taking? Why or why not?
    Exit Ticket

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