Scarcity -- Applications

The following facts are true of scarcity:
1. People economize, that is, they choose the alternative which seems best to them (involves the least cost and the greatest benefit.)
2. All choices involve cost.The opportunity cost is the second best choice people give up when they make their first (best) choice.
3. The consequences of choice lie in the future. Economics stresses making decisions about the future -- what happens next -- because we cannot influence what happened in the past.
The following links will help you apply the basic concept of scarcity.

1. Here is a case study which will help you identify what you gain and what you give up when you make choices. It is titled "The Opportunity Cost of a Lifetime."  http://econedlink.org/lessons/index.cfm?lesson=EM512. In this case study you will ponder the age old question: "Are the Best Things in Life Free?" Economists are fond of saying that "there is no such thing as a free lunch." http://econedlink.org/lessons/index.cfm?lesson=EM17