- 1 What is the most desirable outcome given up when you make a decision?
- 2 What is the alternative that you give up when you make an economic choice?
- 3 What is an alternative that we sacrifice when we make a decision?
- 4 How does scarcity affect decision-making?
- 5 What is the most desirable trade-off?
- 6 How does opportunity cost affect decision making?
- 7 What are the 3 basic economic questions?
- 8 What are examples of trade offs?
- 9 Is what we give up when we choose one thing over another?
- 10 What are decisions made at the margin?
- 11 What are the four factors of production?
- 12 What does it mean to think at the margin?
- 13 How does scarcity affect the poor?
- 14 What are the 3 types of scarcity?
- 15 How are financial decisions related to scarcity?
What is the most desirable outcome given up when you make a decision?
Opportunity Costs vs. Opportunity cost is the most desirable alternative given up as the result of a decision. Trade-Offs are all the alternatives given up as the result of a decision.
What is the alternative that you give up when you make an economic choice?
The alternative that you give up when you make an economic choice is called a trade-off. Usually, trade-offs do not require all-or-nothing choices. Rather, they involve giving up some of one thing to gain more of another.
What is an alternative that we sacrifice when we make a decision?
Opportunity cost is –(a) any alternative we sacrifice when we make a decision.
How does scarcity affect decision-making?
The ability to make decisions comes with a limited capacity. The scarcity state depletes this finite capacity of decision-making. The scarcity of money affects the decision to spend that money on the urgent needs while ignoring the other important things which comes with a burden of future cost.
What is the most desirable trade-off?
Opportunity cost is the most desirable alternative given up as the result of a decision. It is important because it creates opportunities and variation in the economy.
How does opportunity cost affect decision making?
In business, opportunity costs play a major role in decision-making. If you decide to purchase a new piece of equipment, your opportunity cost is the money spent elsewhere. Companies must take both explicit and implicit costs into account when making rational business decisions.
What are the 3 basic economic questions?
Because of scarcity every society or economic system must answer these three (3) basic questions:
- What to produce? ➢ What should be produced in a world with limited resources?
- How to produce? ➢ What resources should be used?
- Who consumes what is produced? ➢ Who acquires the product?
What are examples of trade offs?
In economics, a trade-off is defined as an “opportunity cost.” For example, you might take a day off work to go to a concert, gaining the opportunity of seeing your favorite band, while losing a day’s wages as the cost for that opportunity.
Is what we give up when we choose one thing over another?
Scarcity implies that we must give up one alternative in selecting another.
What are decisions made at the margin?
Choices Are Made at the Margin. Economists argue that most choices are made “at the margin.” The margin is the current level of an activity. Think of it as the edge from which a choice is to be made. A choice at the margin is a decision to do a little more or a little less of something.
What are the four factors of production?
Economists divide the factors of production into four categories: land, labor, capital, and entrepreneurship. The first factor of production is land, but this includes any natural resource used to produce goods and services.
What does it mean to think at the margin?
It means to think about your next step forward. The word “marginal” means “additional.” The first glass of lemonade on a hot day quenches your thirst, but the next glass, maybe not so much. If you think at the margin, you are thinking about what the next or additional action means for you.
How does scarcity affect the poor?
Scarcity increases negative emotions, which affect our decisions. Socioeconomic scarcity is linked to negative emotions like depression and anxiety. viii These changes, in turn, can impact thought processes and behaviors. The effects of scarcity contribute to the cycle of poverty.
What are the 3 types of scarcity?
Scarcity falls into three distinctive categories: demand-induced, supply-induced, and structural.
Perceived Financial Scarcity. Consumers should consider current and future expenses to make objectively better financial decisions. Under conditions of scarcity, an attentional shift causes people to focus on current expenses only.