Economics 102

Making Choices

• Opportunity Cost = the highest valued benefit given up when a choice is made (ex: sitting in traffic vs. unemployment)

Scarcity

• Scarcity = the problem that resources are always limited compared with the number and variety of wants people have

Supply and Demand

• Demand = the amount of a product or service that buyers are willing and able to buy at different prices.

• Supply = the amount of a product that producers are willing and able to offer at different prices.