Opportunity Cost And The Free Market
OPPORTUNITY COST & THE FREE MARKET
Scarcity is one of the most basic and crucial points to understand in microeconomics.1Scarcity means that we cannot have all the needs and wants to satisfy our desires. Scarcity can be applied to almost anything. Due to the scarcity of products we must make a choice of what we want. We must choose whether to do one thing or another by what we value to be most important to us. This, therefore, leads to us opportunity cost. Usually when one has to make a decision over what to do, buy, or build, it is narrowed down to two things. We might choose what satisfies our desires, what is more economical, or what is needed more. The choice that we do not take is our opportunity cost, the choice that we value less. Scarcity, choice, and opportunity cost are all related and interlaced with one another. If resources were unlimited we would never have to choose what is more important to have because we would have it all. A good example of applying scarcity......
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