3.1.1.1 Understanding the basic economic problem: scarcity and choice

• What does scarcity refer to in economics?

  Limited resources vs unlimited wants
• Scarcity forces societies to make choices about resource allocation.


  True
• What decision is used to illustrate the concept of choice with $15 available?

  Choosing lunch options
• Match the aspect of choice with its example:

  Alternatives ↔️ Pizza, burgers, pasta

  Cost-Benefit Analysis ↔️ Pizza is quick but expensive

  Preferences ↔️ Health-conscious choice of pasta
• Scarcity in a drought-stricken area leads to a shortage of clean water.
• Needs are essential for survival, while wants improve comfort and enjoyment.


  True
• Needs are necessary, while wants are non-necessary.
• Match the concept with its example:

  Scarcity ↔️ Not enough clean water

  Choice ↔️ Using water for drinking

  Opportunity Cost ↔️ Lost crop yield
• Choice involves evaluating the costs and benefits of each alternative to determine the most suitable option.


  True
• What is opportunity cost in economics?

  Value of next best alternative
• What is the purpose of cost-benefit analysis in decision-making?

  Compare advantages and disadvantages
• Why does scarcity create the need for choice?

  Limited resources, unlimited wants
• Needs are essential for survival, while wants improve comfort
• Opportunity cost arises due to the economic problem of scarcity
• Scarcity forces individuals to make choices
• Why must societies make choices about resource allocation?

  Resources are scarce
• Wants are essential for survival.

  False
• Choice involves selecting the best option from available alternatives when resources are unlimited.

  False
• Match the concept with its definition:

  Needs ↔️ Essential for survival

  Wants ↔️ Improve comfort and enjoyment
• What is the term for giving up the opportunity to use resources for something else?

  Opportunity cost
• Scarcity occurs when resources are unlimited compared to societal wants and needs.

  False
• Match the factor of economic decision-making with its description:

  Alternatives ↔️ Available options to choose from

  Cost-Benefit Analysis ↔️ Evaluation of advantages and disadvantages

  Preferences ↔️ Individual needs and priorities
• What is the key difference between needs and wants?

  Needs are essential for survival
• Match the real-world example with its corresponding concept:

  Water Allocation in a Drought ↔️ Prioritizing drinking water over crop irrigation

  Household Budget Decisions ↔️ Choosing between new clothes or vacation savings

  Land Use in a Growing City ↔️ Losing potential green spaces for housing
• Scarcity arises because resources are limited while wants and needs are unlimited.
• Choice involves selecting one option over others when resources are scarce.
• Scarcity exists because human wants are unlimited but resources are finite.


  True
• How does considering nutritional value influence a choice when deciding lunch?

  Choosing healthier options
• Order the concepts illustrating how scarcity creates the need for choice:

  1️⃣ Scarcity: Limited availability of resources

  2️⃣ Choice: Deciding between alternatives

  3️⃣ Opportunity Cost: Value of the next best alternative sacrificed
• Match the feature with the type of desire:

  Needs ↔️ Essential for survival

  Wants ↔️ Improve comfort and enjoyment
• Scarcity forces societies to make choices about how to allocate resources effectively.


  True
• Cost-Benefit Analysis compares the advantages and disadvantages of each option.
• Opportunity cost arises because resources are scarce
• Preferences play a key role in the selection process of choices.
• Match the concept with its purpose:

  Scarcity ↔️ Forces resource management

  Choice ↔️ Maximizes satisfaction
• Wants must be satisfied before needs.

  False
• Opportunity cost is the value of the next best alternative that is sacrificed.


  True
• Opportunity cost is the result of scarcity and trade-offs in decision-making.


  True
• The value of the next best alternative that is sacrificed when a choice is made is called the opportunity
• What impact does scarcity have on resource allocation?

  Forces difficult choices