Scarcity and Opportunity Cost Station - Weebly
Scarcity and Opportunity Cost
Scarcity:Whenthereisalimitedamount ofagivenresource Examples:
? Agovernmentworkswitha limitedbudget.Theamount ofmoneythatithasisscarce.
? Astatehasalimitednumber ofacresoffreelandtobuild upon.Theamountoflandis scarce.
? Ateacherhasone90-minute planningperiod.Theamount oftimeisscarce.
OpportunityCost:Whatyou giveupwhenyouhavetomake achoicebetweentwothings. Examples:
? Ihave$15.00to spend.Idecidetobuyabaseballcapinsteadofanew
DVD.TheDVDrepresentsthe opportunitycost. ? Acitygovernmenthas$20,000to spend.Theydecidetospenditonnew
Thissmartkidchosetheappleoverthe Hershey'sBar.TheHershey'sBarwould betheopportunitycostinthisscenario.
jobprogramsinsteadofontrash
collectiondays.Acleanenvironmentistheopportunitycost.
SocioeconomicGoals:Therearethingsthatthegovernmenttriestoachievethroughhowit
spendsmoneyandresources.
? Equity:Equalitybetweenpeople'sopportunities.Thiscanbeachievedinseveral
ways.
RedistributingIncome:Takingfromtherichandgivingtothepoor.
FairWagesforWorkers:Raisingtheminimumwagetoaccountforinflation.
AssistanceforHomebuyers:Givingloanstopeoplewhoarebuyingrealestateif
theycan'taffordit.
EqualEmploymentRights:Makingsurethatpeoplehaveequalopportunitiesto
getandkeepajob.
Name:______________________________________Period:__________Date:_______________________________
SCARCITYANDOPPORTUNITYCOSTPRACTICEACTIVITIES
Directions:Foreachofthefollowingexamples,underlinewhatisscarce.Circletheopportunitycost.
1. JoeyandTanieshaarrivetoschoolthirtyminutesearly.Joeywantstogotothecornerstore.Taniesha
wantstoseeifanyofherteachersareatschoolearlyforextrahelp.Theydecidetogouptoextrahelp
insteadofgoingtothecornerstore.
2. Davontehas$150.00tospendatthemall.HedecidestobuyapairofNewBalancesneakersinsteadof
savingthemoneyinhisbankaccount.
3. TheMarylandGeneralAssemblyhas$1milliontospendindesigningtheupcomingbudget.Statelegislators
decidetospendmostofthatmoneyonnewcurriculumtobeusedinschools,ratherthanrestoringvacant
homes.
Directions:Foreachofthefollowingscenarios,identifytheopportunitycostbycirclingthecorrectchoice.
4. Acitygovernmentdecidestospendmoneyonnewstoplightsinsteadofnewtextbooksforschools.
Whatistheopportunitycostofthisdecision?
Protectingthesafetyofcitizens
Promotingtheeducationofcitizens
5. Ateacherdecidestospendtimegradinghomeworkassignmentsinsteadofmakingphonecallstoparents.
Whatistheopportunitycostofthisdecision?
Givingstudentsfeedback
Communicatingwiththefamiliesofstudents
6. TheUnitedStatesCongressspends$3.2milliononsupportingourarmy,navy,marines,andcoastguard
insteadofonpublicassistanceprograms.
Whatistheopportunitycostofthisdecision?
Ourcountry'snationalsecurity
Ensuringthewelfareofallcitizens
Directions:Answereachofthefollowingscenariosbywritingtheletterofthecorrectmultiple-choicequestionon
theline.
_________7.ThegovernorofMarylandchosetocut
_________8.Alocalgovernmenthasalimited
spendingonroadconstructioninordertoincrease
amountofmoneytospend.Itdecidestospendthe
spendingforschoolconstruction.
moneytosupportlocalbusinessesinsteadofto
removetrashfromunusedbuildingsandvacantlots.
Whicheconomicprincipleisbestdemonstratedby
thisdecision?
Whichoftheseistheopportunitycostofthis
decision?
A.economicfreedom
B.opportunitycost
A.taxrevenue
C.pricecontrols
B.jobsforlocalresidents
D.supplyanddemand
C.acleanenvironment
D.profitsforbusinessowners
Directions:Readthepassagesbelow.Then,answertheshortanswerquestionsthatfollow. Read: In2002,theMarylandGeneralAssemblyvotedtopurchaseundevelopedlandontheChesapeakeBaybeforea constructioncompanycouldpurchaseit.Thestateplanstousethelandasaparkforrecreationalactivitiesinstead oflettingitbecomedeveloped. 9.Describetheopportunitycostofthepurchase. _________________________________________________________________________________________________ _________________________________________________________________________________________________ 10.Doyouthinkthatitisbeneficialforthegovernmenttobuyunderdevelopedland?Explain. _________________________________________________________________________________________________ _________________________________________________________________________________________________ _________________________________________________________________________________________________ _________________________________________________________________________________________________ Read: In2009,GovernorO'Malleyproposedthatseveralbilliondollarsbemadeavailabletocreateanewjuvenile detentioncenterinMaryland.Withthatmoney,hecouldhaveemployedeveryhighschoolstudentinBaltimoreCity forayear. 11.Describetheopportunitycostofthepurchase. _________________________________________________________________________________________________ _________________________________________________________________________________________________ 12.DothebenefitsofO'Malley'sproposaloutweighthecosts?Explain. _________________________________________________________________________________________________ _________________________________________________________________________________________________ _________________________________________________________________________________________________ Read: In2005,thestategovernmentofLouisianahadtospendmoneycleaningupafterHurricaneKatrina.Thismeant thatotherserviceshadtobecutfromthestatebudget. 11.Describetheopportunitycostofthepurchase.Bespecificaboutwhat"otherservices"mightinclude. _________________________________________________________________________________________________ _________________________________________________________________________________________________ 12.Explainhowscarcityaffectsthestategovernment'sdecisionmaking. _________________________________________________________________________________________________ _________________________________________________________________________________________________ _________________________________________________________________________________________________ _________________________________________________________________________________________________ Directions:Identifythesocioeconomicgoalthatthegovernmentistryingtoachieveineachofthefollowing scenarios.(Redistributingincome,AssistanceforHomebuyers,EqualEmploymentRights,FairWagesforWorkers) 13._________________________Thegovernmentraisestaxesfortherichandcutstaxesforthepoor. 14._________________________Congressincreasestheminimumwagetokeepupwithinflation. 15.__________________________TheCityCouncildecidestoincreasefundingforfirsttimehomebuyers.
Name:________________________________________Period:___________Date:____________________________
SCARCITYANDOPPORTUNITYCOSTEXITTICKET
1. Readtheheadlinebelowandanswerthequestionthatfollows.
"PlanstoIncreaseAlaskanOilDrilling"
Whatisaneconomiccostmostdirectlyassociatedwiththeheadline?
a) lessundevelopedland
b) increasedfuelprices
c) decreasedtaxrevenues
d) greaterjobopportunities
2. ThegovernorofMarylandchosetocutspendingonroadconstructioninordertoincreasespendingfor
schoolconstruction.
Whichprincipleisbestdemonstratedbythisdecision?
a) economicfreedom
b) opportunitycost
c) pricecontrols
d) supplyanddemand
3. Alocalgovernmenthasalimitedamountofmoneytospend.Theydecidetospendmoremoneyon
cleaninguppollutionthanonpublicassistanceprograms.
Whichisanopportunitycostofthisdecision?
a) environmentalprotection
b) thewelfareofcitizens
c) nationalsecurity
d) protectionagainstnaturaldisasters
4. Whichoftheseisaneconomicbenefitoflowertaxrates?
a) moreconsumerspending
b) expandedgovernmentprograms
c) betterpublicservices
d) agreaternumberofgovernmentemployees
5. Readthenewspaperarticleexcerpttothe right: Theactiondescribedinthearticleaboveis intendedto a) supportlocalbusinesses b) generaterevenueforthecity c) promoteeconomicequityinthearea
LEGISLATURETOPROVIDEASSISTANCETOFIRST
TIMEHOMEBUYERS Inresponsetorisinghousingcosts,thestate legislaturehasvotedtoprovidefinancialassistance tolow-incomefamiliestohelppurchasetheirfirst
house.
d) limitsupportforlocalbusinesses
6. Thefederalminimumwagein2001was$5.15anhour.
Whichofthesebestdescribeswhythefederalgovernmentwouldraisetheminimumwage?
a) tohelpworkersfindemployment
b) tohelpworker'swageskeepupwithinflation
c) toincreasethetaxonworkers'wages
d) tomakesureallworkersreceivethesamepay
7. Whichoftheseisaneconomicbenefitofthefederalminimumwagelaw?
a) Workersareguaranteedacertainincome.
b) Employersareencouragedtohiremoreworkers.
c) Employersarerequiredtotrainmoreworkers.
d) Workersareallowedtoorganizeintounions.
8. Whichofthefollowingscenarioswouldillustratetheprincipleofopportunitycost?
a) aboyhasonlythreedollarstospendwhengoingtothemall
b) Congressreviewsitsannualbudget
c) GovernorO'Malleyspendsmoneyoncrimepreventionratherthantheenvironment
d) AlobbyistpersuadesCongressmentosupportnewlegislation
9. Aschooldistricthasalimitedamountofmoneytospend.Theydecidetospendmoneyfixingtheschool
buildingsratherthanprovidingnewtextbooks.
Whichofthefollowingistheopportunitycostofthisdecision?
a) newtextbooks
b) newschoolbuildings
c) increasedtransportationbetweenschools
d) newschoolroofs
10. Whatistheopportunitycostforstategovernmentsthatspendstatemoneyduringnaturaldisasters?
a) mainhighwaysbetweenstatesmaybeblocked
b) pricesforsnowremovalequipmentmayincrease
c) otherservicesofferedbythestatesmayhavetobecut
d) stategovernmentsmayreceiveadditionalhighwayfunds
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