ECO101H1 Lecture 1: Lecture 1-The Economic Way of Thinking

Every economic choice has an opportunity cost --- the value of the best alternative you gave up in order to pursue the activity you chose instead. For example, if you receive a $50,000 job offer and a $40,000 job offer, the opportunity cost of taking the first job is $40,000, and the opportunity cost of taking the second job is $50,000. Is the option with the lowest opportunity cost always the best choice to make.

Opportunity cost arise due to :

1. Resource scarcity. 
2. Lack of alternative. 
3. Limited wants. 
4. Abundance of resources. 

1) The fact that human wants cannot be fully satisfied with available resources is called the problem of A) scarcity. B) marginal cost. C) the big tradeoff. D) normative economics. E) opportunity cost.