Introduction to Economics:

Question

Explain why scarcity and choice are basic problems of economics?

Answer 1

http://tutor2u.net/blog/index.php/economics/comments/study-note-the-basic-economic-problem-scarcity-and-choice

Answer 2

This is what i put for my answer..

The need to make choices arises because everything that exists is limited. How people and societies make these choices is the focus of economics. At any moment, a fixed amount of of resources is available. At the same time, people have competing uses for these resources this situation results in scarcity.

Answer 3

Good.

Answer 4

Thank You!

I have another question I'm having a hard time with.

How are trade-off and opportunity cost related?

I know that trade-off is like when you buy a CD you are exchanging the right to own it. Your exchanging one thing for the use of another. But i don't get opportunity cost.

Answer 5

Opportunity cost is what you gave up to purchase the CD. What else could you have bought for the $15 you spent on the CD?

http://www.investopedia.com/terms/o/opportunitycost.asp#axzz1raIQ9dF7

Answer 6

So its like a choice you have. Instead of buying the CD for full price which $15 I could have purchased the same CD at another store for half price.

Answer 7

You could have bought a nice restaurant meal or a new shirt or a book or saved the money.

Answer 8

Oh ok i get it now thanks again Ms. Sue

Just wondering, if that's the case of opportunity cost, wont it just keep repeating it self?