Question

Explain the following concepts (opportunity cost, scarcity, choice and scale of
Preference using appropriate examples and tables where necessary.

Answer 1

nate # Date Page opportunity cost # $ opportunity cost is defined as the value foregone. next best alternative १ # How Society Operater ? and also have As we know that the resources are scarce, the alternative uses chaices needs to be made from alternative uses. terms of making choices alternatives in from different the opportunity cost is here used in # for example: Suppose there is a piece of land, which is equally fut for nie, wheat and gram production, Yields from production 10,000 9000 and 8000 respectively out + Here clearly we see a farmer has three alternatives to choose from ie what to grow of the Suppose he decides to produce rice clearly oppostinity cost of producing rice will be 9000 because it was the best alternature for production # This opportunity cost is the amount that is sacrificed to produce that commodity (here rice) next of other good (wheat) Scanned by TapScanner

of is more than their Scarcity • Problem scarcity is one Economic problems. It means acute Shortage of a certain commodity, because of the limitation supply in relation to its demand • As a result of this demand of this demand for resources availability. Thus, efforts have been made to economise limited resources, by allocating them in a such a way to maximise the wants satisfy the maxumum wants of preference • It enables the consumer to make a choice that will give maximum salifaction Scale him • For example Value 500 lon 50 is absolutely no way 50 ITEM Here consumer had suppose $ 600 to Computer Spent, he would be able to purch- Bag ase only computer and Bag. There Shoes the person would Phone purchase anything in list before computer ( as sequence is in terms of most important needs) Choice of preference A choice is selecting something over another one is playing a game to choose berucen A and ß. This is called compbekly arbitary choice o whereas breference is selecting something that you lite over other items available, Examble as Scanned by TapScanner