If opportunity cost is constant or increasing for one of the goods, it is constant or increasing respec-tively for both goods. 2017/2018 (C) The opportunity cost of increasing production of Good A from two units to three units is the loss of two unit(s) of Good B. B)scarcity. Welker. Scarcity, Opportunity Cost and PPC practice activity Welker Introduction: Assume the US government has discovered it has a surplus in its budget of $100 billion. Try this: Do as many pushups as you can in 30 seconds and record the number. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Define scarcity and opportunity cost. Examiners like testing the relationship between the shape of a PPF and the concept of opportunity cost. University. Record that number. Scarcity and opportunity cost represent two interlinking concepts in economics as companies must often choose among scarce resources. 42) Define the opportunity cost of a decision as the most valued discarded option; Analyze trade-offs involved in making spending decisions. Answers Included What is the opportunity cost of moving from point D to point E? _____ Production Alternative_____ He has over twenty years experience as Head of Economics at leading schools. Society’s wants are unlimited, but ALL resources are limited (scarcity). After you have finished the quiz, click on the Grade my Quiz button at the bottom of the page. and services, productive resources, scarcity, opportunity cost, trade-offs, and price. Introduction: Assume the US government has discovered it has a surplus in its budget of $100 billion. In each activity in this unit, students use play dough to help them learn the economic concepts. Activity 2 pro-vides practice at determining absolute and compar-ative advantage. All the points on the PPC represent productive efficient levels of production. (B) … The slope of a straight-line PPC is equal to the opportunity cost – specifically, the opportunity cost for the good measured on the horizontal axis in terms of the good measured on the vertical access . After three hours, the additional benefit from staying an additional half-hour would likely be less than the additional cost. Unformatted text preview: Welker’s Wikinomics practice activities 1.0 Introduction to Economics Scarcity, Opportunity Cost and PPC Introduction: Assume the US government has discovered it has a surplus in its budget of $100 billion.One party wishes to invest this surplus in new resources for education, while the other wishes to invest in new defense infrastructure. Concepts: Opportunity Cost Scarcity Capital Goods Choice Consumer Goods Communism Content Standards and Benchmarks (1, 3 and 15): Standard 1: Productive resources are limited. The students will then have the opportunity to practice the newly learned content through a simulation. 3. Explain the economic problem of scarcity. What is the opportunity cost of moving from point B to point C? Grades: 9 th, 10 th, 11 th, 12 th. The basic economic problem is one rooted in both the natural world and in human greed. Directions This quiz contains 15 multiple choice questions. 4. This represents increasing opportunity cost. D)opportunity cost. Apply scarcity and opportunity cost to a num-ber of everyday situations. Joey wants to go to the corner store. Scarcity, Opportunity Cost and the Production Possibilities Curve. Dayne Lee. Law of increasing opportunity cost – when the production of a particular good increases, the opportunity cost of producing an additional unit rises. These worksheets are designed to quickly understand the PPC which explains efficiency, scarcity, and opportunity cost. Every choice has a cost (a trade-off). The PPC or production possibility curve/ frontier is a presumptive depiction of the different conceivable combinations of two goods that can be produced within the given available resource. This question does precisely that! D)substitution cost. Using pushups on one axis and homework problems on the other, plot a straight line PPC. SCARCITY AND OPPORTUNITY COST PRACTICE ACTIVITIES Directions: For each of the following examples, underline what is scarce. Opportunity cost is a key concept in economics, and has been described as expressing "the basic relationship between scarcity and choice". Joey and Taniesha arrive to school thirty minutes early. Any resource that has a non-zero cost to consume is scarce to some degree, but what matters in practice is relative scarcity. 41) 42)The loss of the highest-valued alternative defines the concept of A)entrepreneurship. Calculate the relative opportunity costs. For an individual, it may involve choosing the best from the choices available. Academic year. The concept of scarcity, choice and opportunity cost can be shown in many ways, at different levels. Quiz on the PPC, Opportunity Cost, and the Gains from Trade. High schoolers practice the economic concepts of scarcity and opportunity cost. It is a model of a macro economy used to analyze the production decisions in the economy and the problem of scarcity. Define the concept of opportunity cost. Choosing one option means the other option has to be forgone. Scarcity is also referred to as "paucity." Have a go! 5 Key Economic Assumptions. Students learn how to graph a PPC (aka a PPF), how opportunity cos . One party wishes to invest this surplus in new resources for education, while the other wishes to invest in new defense infrastructure. Apply the concept of opportunity cost to a pro-duction possibilities curve. Key Takeaways. Learn vocabulary, terms, and more with flashcards, games, and other study tools. 1. As production of food increases, production of clothing declines and vice versa. Due to scarcity, choices must be made. Economics: Opportunity Cost and Scarcity 1. Subjects: Business, Economics . It is important to learn to make good economic choices, or decisions. Swinburne University of Technology. 5. A PPC will help you see the opportunity cost of your decisions. Time required. 2. 3. 1. One copy of Planning the Prom, Activity 1, for each student. Scarcity, Opportunity Cost, and Production Possibilities Curves The primary economic problem facing all individuals, families, businesses, and nations is the scarcity of resources: There simply are not enough resources to satisfy the unlimited wants for goods and services. might outweigh the additional cost (the opportunity cost). Geoff Riley FRSA has been teaching Economics for over thirty years. Production Possibilities Curve – a graph that shows alternative ways to use an economy’s resources – does not show consumer satisfaction. Taniesha wants to see if any of her teachers are at school early for extra help. Economic Principles (ECO10004) Uploaded by. Then, solve as many homework problems as possible in 30 seconds. Every time someone makes a choice, there are other things that are not chosen. Objectives 1. This PDF download is great practice for students' understanding of the ins and outs of the PPC. Product Possibilities Curve Practice . D)an opportunity cost 40) 41)The term used to emphasize that making choices in the face of scarcity involves a cost is A)utility cost. Lesson 2: Opportunity Cost Big Ideas of the Lesson Because of scarcity, people have to make choices. For example, a student may have to choose between doing A levels and going for a diploma right after finishing O levels. The PPC is "bowed outward" (concave) from the origin. Benchmarks: Whenever a choice is made, something is […] We live in a world of limited resources, but we seem to have unlimited wants. When discussing the answers, consider these points: (A) The law of increasing opportunity cost is hard for students to grasp. In most cases, economic resources are not completely available at all times in unlimited numbers, so companies must make a choice about which resources to use during production. Start studying Scarcity, Choice and Opportunity Cost. Scarcity, Opportunity Cost and PPC practice activity. Go over Activity 2. Opportunity cost is measured by the slope of the PPC (the change in along y-axis divided by the change along the x-axis). What is the opportunity cost of moving from point A to point B? On which activity do you have … limited resources are used to satisfy unlimited wants. 1. Therefore, people cannot have all the goods and services they want; as a result, they must choose some things and give up others. This quiz has around twelve questions of the same topic; choose the correct answer. 4. The production possibilities frontier is used to illustrate the economic circumstances of scarcity, choice, and opportunity cost. Practice Questions 2 - Opportunity Cost and Trade Practice question with answers. Lesson Abstract: Materials - If you are working offline. Two class periods: Day One - Activity 1 Day Two - Activity 2 and Assessment. Scarcity, Choice, and the Production Possibilities Curve Chapter Exam Instructions. in the process choices have to be made which leads to an opportunity cost. B)opportunity cost. TAGS: resources, scarcity. [3 marks] Three points to be covered: Explanation could include: there are limited/finite resources and unlimited wants. The next best thing that is not chosen is called a person’s opportunity cost. 2. To describe the concept of the production possibilities frontier, assume that we live on an island that has only two cities (Lake and Desert), and two industries (cars and airplanes). Scarcity necessitates choice. Simple and easy worksheets to practice production possibility curve (PPC). One party wishes to invest this surplus in new resources for education, while the other wishes to invest in new defense infrastructure. Please use your own piece of paper to complete this practice activity. The PPC is a economic framework that can be used to illustrate concepts of scarcity, choices and opportunity costs. Course. C)accounting cost. They imagine creating their own businesses and brainstorm what they need to … Start studying Economics chapter 2 (Scarcity and opportunity costs). C)marginal benefit. Select the correct answer by clicking on the appropriate button. The concept of opportunity cost and associated tradeoffs may be illustrated with a picture. This is enough to give students practice without creating disengagement and works well for a college prep or AP level economics course. The opportunity cost represents the alternative given up when … Your score is neither recorded nor transmitted to your instructor. Their answers will be contributed as a group discussion. Choose your answers to the questions and click 'Next' to see the next set of questions. (D) This is an example of (constant / increasing / decreasing / zero) opportunity cost per unit for Good A. Construct production possibilities curves using hypothetical data. 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