Scarcity and Opportunity Cost Station - Weebly

[Pages:5]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

Stop!TeacherorTAfillsoutbelow:

TotalScore:

Mastery?

Ifyoumasteredtheobjective,youcanmoveontoyournextCLG.

Ifnot,youneedtoredothestation.

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