Question

financial literacy
day 2 worksheet - economic decision - making
topic: trade - offs, opportunity cost, scarcity
part a: matching type (5 points)
directions: match the term in column a with the correct description in column b.
column a (terms)

1. opportunity cost
2. trade - off
3. scarcity
4. needs
5. wants

column b (descriptions)
a. limited resources available to meet unlimited desires
b. choosing one option means giving up another
c. basic requirements for survival (food, shelter, clothing)
d. things people desire to improve quality of life (gadgets, luxury)
e. the next best alternative forgone when a choice is made
part b: multiple choice (10 points)
directions: encircle the letter of the correct answer.

1. which concept explains why choosing to study means giving up time to play?

a) scarcity
b) opportunity cost
c) needs
d) wants

1. what does scarcity force people to do?

a) ignore resources
b) make choices
c) avoid decisions
d) increase wants

Explanation:

1. Opportunity Cost: It is the value of the next - best alternative forgone when a choice is made. So it matches with E.
2. Trade - off: Choosing one option means giving up another, which is B.
3. Scarcity: It refers to limited resources available to meet unlimited desires, so A.
4. Needs: These are basic requirements for survival like food, shelter, clothing, so C.
5. Wants: Things people desire to improve quality of life such as gadgets, luxury, so D.

For Part B:

1. When choosing to study and giving up time to play, it is an example of opportunity cost as you are forgoing one activity (playing) for another (studying). So the answer is b).
2. Scarcity forces people to make choices because resources are limited. So the answer is b).

Answer:

Part A:

1. E. The next best alternative forgone when a choice is made
2. B. Choosing one option means giving up another
3. A. Limited resources available to meet unlimited desires
4. C. Basic requirements for survival (food, shelter, clothing)
5. D. Things people desire to improve quality of life (gadgets, luxury)

Part B:

1. b) Opportunity Cost
2. b) Make choices