Describe how the concepts of scarcity, choice, and opportunity cost apply to eac

Question

Describe how the concepts of scarcity, choice, and opportunity cost apply to each of the following situations. Think about what exactly the scarce resource is, what the choice there is to be made, and what the opportunity cost (there is going to be more than one) of the choice might be.

-You debate using a Saturday afternoon to (1) nap or (2) work on this assignment.
-The Oswego County legislature, facing a large budget deficit, debates over whether to (1) increase property taxes 35% or (2) increase property taxes only 15% and lay off 100 county workers.

Explanation / Answer

1. Here the Scarce resource is Time of Saturday afternoon , So he has to make choice between two options as 1. take a nap 2. work on this assignment, to decide what to do on saturday afternoon.

The oppurtunity cost of Nap is working on this assignment or doing nothing and

Opportunity cost of working on this assignment is taking a nap or doing nothing

2. Here the scarce resource is the Budget which (Government Revenue - Government Expenditure).

Here the choice options are 1. increase property taxes 35% or (2) increase property taxes only 15% and lay off 100 county workers.

The oppurtunity cost of  increasing property taxes 35% is reduced deficit by increasing property taxes only 15% and laying off 100 county workers or donig nothing and having a large budget deficit

The oppurtunity cost of  increasing property taxes only 15% and laying 100 workers is reduced deficit by increasing property taxes 35% or donig nothing and having a large budget deficit

If you don't understand then comment, I'ill revert back on the same. :)

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