Answer to Question #240293 in Microeconomics for Rhianna

Question

A University graduate recieves his first pay cheque. Discuss how scarcity,choice and opportunity cost arise for the graduate on his first shopping trip to the city

Answer 1

Opportunity cost arises where he decides to shop one commodity leaving another one. For example he may decide to buy essential commodities eg sugar, salt and cooking oil therefore leaving non-essential commodities like pizza and ice cream for example. Choice is where he decides to share the available resource and scarcity, he will use the money scarcely because money is a very scarce resource so that he may safe some for future use or for any emergency