what you must forego to obtain some item is called your
Introduction
This page looks farther at the question of what is economics and given that nosotros exercise not live in a perfect globe, we are forced to brand choices in terms of how nosotros spend our deficient financial resources also as how we spend our time.
Enquiry question
What is scarcity and why does it be? Why does the scarcity of a good or service depend equally much on location and circumstance as the product in question? What is the basic economic question?
Instructor notes
Lesson time: 120 minutes
Lesson objectives:
To develop an understanding of the concept of scarcity and why does economics depend on scarcity? Developing an understanding of the human relationship between scarcity and opportunity toll and how in any gild the market identify is the medium past which sellers and consumers come across.
Instruction notes:
1. First activity - starting time with the opening video on scarcity before having your class complete the beginning activity which asks students to record their current purchases, also as those purchases they would brand if their budget / allowances allowed them to buy more goods and services. Guide the students through the task and link their choices to opportunity cost. (15 minutes)
2. Physical procedure - students should then read the course handout, which includes key terms and activities. Make the point that the scarcity of whatsoever good depends on the state of affairs and place every bit well as the actual good or service in question. For instance sand can be a gratis good in the desert but an economic good in an urban environment. Activity two illustrates this well so spend some time discussing the ii photographs, showing an entrepeneur making money by selling 'air'. emphasize the point that the entrepreneur is selling air (15 minutes)
3. Discussion activity - on economic and free goods. (x minutes)
four. Beautiful market places action - testify the slideshow entitled beautiful market places and contrast the style that market places are set up in wealthy nations such as France and Netherlands and those from the developing world. (xv minutes)
5. Grade do on opportunity toll, taken from the reddish pill, bluish pill moment in the film Matrix. (15 minutes)
half-dozen. Final video activeness linking the concepts of markets to the film Star wars. (ten minutes)
seven. Assessment - students can then consummate the activity on scarcity, either as a class or homework do. The aim existence to decide who lives and who dies based on the merits of each patient. (30 minutes)
Cardinal terms:
The basic economic question - defined as limited resources and unlimited wants.
Opportunity cost - the price or value of an economic decision in terms of the next all-time option foregone.
Free goods - goods which are unlimited in supply have no opportunity cost. Examples might include fresh air, bounding main water in littoral areas or sand in the desert. These goods accept no economic value and at zero toll are still limitless.
Economic goods - all goods which have a value, derived from the fact that they are limited in supply. This might also apply to appurtenances such as fresh air in certain over polluted cities or sand in an urban, not desert environment.
Market place - whatever physical or online location where consumers and suppliers meet, to exchange their goods and services.
Showtime activeness
Sentry the post-obit short video which explains the concept of scarcity and and so consummate the activity that follows:
Equally IB students you are examples of consumers who either consciously or otherwise brand economic decisions everyday - how to spend your scarce resources. You lot will have a dissimilar proper name for scarce resources - mayhap you lot call it a monthly assart, money from your parents, wages from your function time job e.t.c. Start by writing downwards a list of the purchases that you regularly brand. Now complete this practice by writing down a list of those goods and services which you would like to consume if your monthly budget were significantly larger. What about those goods and services which you choose non to purchase if your monthly allowance was reduced? Without knowing you lot are making a consumption conclusion based on the relative opportunity costs of your purchases.
Activity 2
(a) The photograph illustrates illustrates an economic good from Zhengzhou city, Henan province. A heavily polluted city in People's republic of china where some of the residents are hooked up to oxygen masks then they can breathe in some fresh air as the country's pollution hits crunch levels. Why is fresh air a free good in some locations but an economic proficient in others.
In economics we make a stardom between a small number of 'free' appurtenances which are limitless and which have no economic value. Equally soon equally they become limited, therefore, then those same goods take a value. This is why cities with highly polluted air in some Asian countries see fresh air sold in 'oxygen cafes' – sometimes for considerable prices.
(b) The basic economic trouble can be summarised equally unlimited wants / needs but limited resources to buy them. Why does this mean that all purchases of economic goods comes at an opportunity toll?
Given that well-nigh people have express incomes they must make choices in how they spend their income. Every conclusion that a consumer makes comes at a price, as each item purchased reduces the disposable income that a consumer has to purchase other goods and services. This is called opportunity cost – the next best available option foregone.
(c) What is the function of markets in mod society?
Given that any gild consists of suppliers / producers wishing to sell their appurtenances and services, as well as consumers wishing to purchase them, any club must therefore contain a medium for enabling the necessary trade to take place. This is called a market place.
Class notes available at:
Scarcity notes
3. Discussion on scarcity
Why is it that in some parts of the world goods such as sand or water are free goods while in other areas those aforementioned goods get economic goods and can be sold openly in the market place place?
Hint:
Over again the response comes downward to scarcity. In parts of the earth where those goods are effectively limitless they are costless goods, having no commercial value while in others the scarcity of those goods makes information technology possible to package the practiced and sell it. The same applies to the packaging and sale of fresh air in the polluted cities of China. Dissimilar most parts of the world in some cities fresh air is limited in supply and can be sold.
Activity iv: Beautiful marketplaces
Your instructor volition show you lot the following presentation which contains beautiful images of marketplaces. Then answer the following question, do these pictures of different market places provide any clues as to the business environments where they came from?
Pictures of cute marketplace places
Hint:
When I evidence the images of the different market places to my ain classes the nearly mutual statement which I hear is the difference betwixt those from European / western economies such equally Barcelona, Amsterdam eastward.t.c. and those from nations in Asia and the heart eastward. The European market places seem cleaner, more than organised, perhaps more sterile even in the way that the products are organised. For example when I observe the cheese market in the Netherlands the formation and even spacing suggests that the products have been transported by some grade of mechanised transport, rather than carried by hand.
5. Class exercise on opportunity cost
You lot are given $ 100 by your parents to spend on goods and services. List the things that you would like to buy in gild of priority likewise as the approximate price of purchasing those goods or services. Which goods and services will you purchase and which will you forego? Those items correspond the opportunity price of your initial purchases.
Remember that the opportunity cost will ever be the 2nd all-time pick that you gave up. So if yous are undecided equally to how to spend your $ 100 and y'all have a option between going on holiday with your friends and spending the coin on clothes and so the one that you choose to forego is the opportunity toll. If you choose the holiday then your opportunity cost is the clothes that yous can now longer purchase.
This was an easy question, now for the existent life blue pill question. Suppose your favourite college costs your parents $ xxx,000 to consummate and you lot are offered the course or the cash to start a business organization, which pick would you select?
How would you spend the $ 30,000
Responses should include current versus future earnings too as the culling life decisions you could make. Think that statistically 80% of new businesses fail, where as if you work hard y'all should achieve your IB.
Farther reading on this topic can exist constitute at: 
University article
Activity 6: Links to economics activity in Starwars
Watch the following brusque video and and then decide what other connections can we make betwixt economic science and the Star wars trilogy.
Activity 7: Scarcity inside the local hospital
A pocket-sized town has one hospital and in this infirmary there is just one radiology automobile. This is used to treat patients diagnosed with Leukaemia and without this treatment the patient would quickly dice. Typically treatment lasts ane year, after which the majority will no longer require treatment and be able to return to work. The one radiology automobile can run for 30 hours per calendar week and under the current budget cycle at that place are insufficient funds to purchase some other. Equally the manager of the infirmary, y'all must decide who gets the treatment and who misses out. The treatment is successful in 99% of cases. The list of patients requiring handling is every bit follows:
Patient A: six year former kid, has iii brothers and sisters, requires handling 3 hours per week.
Patient B: 32 years one-time female university lecturer, married with no children, 4 hours per calendar week.
Patient C: 6 year old kid who needs 10 hours per week.
Patient D: A 3 year old child with a more than ambitious strain of the cancer. She currently needs 4 hours per week but may require treatment for an indefinite period due to the severity of her condition.
Patient E: 8 year old kid, no brothers and sisters, five hours per week.
Patient F: 30 yr old female entrepreneur, two immature children, 6 hours per week.
Patient G: xxx twelvemonth old male engineer with two young children, five hours per week.
Patient H: 76 twelvemonth old female, 2 hours per week.
Patient I: A l yr old man who needs 5 hours per calendar week. He is married with grown up children and currently working.
Patient J: 45 year old man with no children, working in a local restaurant. Requires just two hours per week for just half-dozen months.
Patient M: A very wealthy 66 yr erstwhile man who requires 10 hours per week but has agreed to purchase the hospital a second radiology machine if he is still alive in ane year's time.
Determine how you lot will allocate the xxx hours, in order of preference.
Hint:
Who to salve and who to deny treatment to is a hard one, you are all economics students just besides humans as well? As a man you may be very reluctant to deny handling to an 8 year old kid? As an economist though, does information technology might make sense? Later all an viii twelvemonth old child is not currently economically agile and every bit an economist you may decide to sacrifice the child for more than economically productive patients. Patient K is also a tricky one, saving this wealthy individual ways sacrificing one third of all your radiology time this yr, simply comes with the hope of a new machine purchase the following one.
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Source: https://www.thinkib.net/economics/page/20093/unit-11-scarcity-choice-and-opportunity-cost