Problem

Explain why individuals make choices that are dir…

01:12

Problem 8 Easy Difficulty

Explain why scarcity leads to tradeoffs.

Answer

\begin{array}{l}{\text { For example, a person can either buy a bike or car as his income does not allow him to buy both. }} \\ {\text { This is a situation of trade off in which a person has to forgo the desire of bike in order to }} \\ {\text { purchase car. }}\end{array}

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Principles of Microeconomics for AP® Courses

Chapter 2

Choice in a World of Scarcity

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Video Transcript

everyone today resolving problem number eight from chapter to the textbook, which states which asked us to explain why scarcity leads to trade offs. So scarcity, why that meets the tradeoffs. It's the first thing we have to do is really define what scarcity is. So scarcity is basically one of the fundamental features of economics. The fact is, in today's world, people was wants or desires those desires and wants those exceed the not every source is actually present. The film, that's what Sivits that leads to a scarcity resource. What happens after that is that you have, um, scarce resources, so there's not enough to go around for everyone. So when you have, when scarce use versus argues, though, people are forced to make choices. So because of the scarce resources when these air used, what happens is that people have to make choices about what they want and what they have to give up, essentially to get whatever they really, really want versus what they really want. People have to make choices about inserted and choices, no reason why there will be a trade off and in economics the proper term to describe such a choice where you have to give up one thing to get another is opportunity. Cost an opportunity. Costs is probably the best way to describe treat off that. Referring to this problem. It's the cost, not just monetary. Don't just think it's a monetary faucets, different kinds of cost, too, because not everything is a monetary cost. People opportunity. Cost is whatever you have to give up again, that that could be monetary, monetary, like it could be a dollar. Not also be not a dollar. No. Um so it's whatever you have to give up for one thing to get something else you really want versus something really want. So that's not really think about it. So we have scarcity and reality, and it's like one year wants exceed. My research is actually present to fill those wants, which leads to that scarcity of the resources. And then when Monday's you sources are used, people have to choose on back choices known as opportunity cost, which is the same thing, which is what will be to trade off. I mean, that's what you have to give up, get something else in economics. So that is why scarcity will need to trade offs. If you guys enjoying my video explanation pieces feel like next to it hope y'all have the next day. And thank you for watching.

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