Question
Outline the relationship between scarcity, choice and opportunity cost with respect to satisfaction of human wants.
Answer
- Human wants are unlimited and yet resources used to satisfy them are scarce.
- Consumers make a list of wants in order of priority hence making a choice between the competing alternatives.
- Having made a choice, the foregone alternative becomes the opportunity cost for the need that has been satisfied.
- Consumers make a list of wants in order of priority hence making a choice between the competing alternatives.
- Having made a choice, the foregone alternative becomes the opportunity cost for the need that has been satisfied.
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