why scarcity problems convence individual to consider opportunity cost?

Answer 1

Think about a grade schooler [1-3]. They can make a list of items they want from a store for their birthday. Maybe all items on the list cost over $1,000 dollars.

Some family person hands them a hundred dollar bill and tells them to buy whatever they like for their birthday. Now this child initially wanted or needed $1,000 dollars worth of commerce.. All he actually has is a hundred dollar bill.. [economic scarcity] 1/10 of what was desired. Opportunity cost will have to be considered.. or getting the most he can for his limited amount of money.

This individual will have to decide.. if they buy a bicycle, they can't buy computer games, if they buy candy they might get sick and have nothing to show for the money after the candy is gone.

Now if this child were savvy he might get a good book on starting a good business for children or other ways of capitalizing. He could eventually turn that $100 dollars into $1,000 dollars.. and that $1,000 dollars into $10,000 dollars [you get the drill how it takes money to make money]

Answer 2

Now because resources are limited or scarce, individuals cannot have everything they want and so must make choices. In making choices, they consider their options and choose which option they want most and which ones they should give up. The ones that they give up is the opportunity cost.