Practise how scarcity creates choices, opportunity costs and resource allocation decisions for consumers, firms and governments.
What is essential to eliminate scarcity?
the existence of sufficient resources to meet all needs and wants
producers consistently produce in excess of demand
the government has a surplus budget
there is equilibrium in all markets
A
What is correct about scarcity?
Scarcity affects low income earners only.
Scarcity forces individuals to make choices.
Scarcity is removed by periods of falling prices.
Scarcity will be abolished by advances in technology.
B
A worker earns $ 40 per hour. Rather than work, she decides to visit a museum for three hours. The visit costs a total of $40.
What is the opportunity cost of visiting the museum?
$ 40
$ 80
$ 120
$ 160
C