Scarcity, choices and opportunity cost

Grade 12 Social Studies Worksheet - Building Confidence

Circle the best answer.

1. Read this first

   Use this

   Mari's Saturday (example figures, made up for practice). Columns: Choice, Pay, Mari's rank (1 = most wanted). Tutoring, $15 an hour, 1; Yard work, $12 an hour, 2; Band practice, $0, 3; Movie with friends, $0, ticket $10, 4. Mari has six free hours and can do one choice for all six. The ranks are her own. Opportunity cost is the value of the next-best choice given up.

2. 1.

   Mari picks tutoring for all six hours. Ari asks what Mari's opportunity cost is. Which answer fits the table?

   • The $15 an hour she earns, since that is the price she pays for choosing tutoring
   • Nothing, since she is paid for tutoring and so loses no money by choosing it
   • Yard work, her second choice, for the same six hours
   • Band practice and the movie together, since she gives up each other choice at once
3. 2.

   Mari has chosen tutoring. Bo asks which change would raise Mari's opportunity cost. Which one does?

   • Tutoring paying $18 an hour, since a better wage makes each hour of tutoring cost more
   • Band practice getting a new teacher, since her third choice would then be easier to enjoy
   • Yard work paying $18 an hour, since her best alternative would then be worth more
   • The movie ticket falling to $5, since a cheaper movie makes her fourth choice more tempting
4. 3.

   Mari says, "Tutoring costs me nothing because I get paid." Esme tests the claim. What is the best reply?

   • Not so: tutoring uses six hours she could have spent on yard work, her next-best choice
   • Right: opportunity cost counts only money spent, and tutoring costs her no money
   • Right: she is paid more than yard work would pay, so her cost drops to zero
   • Not so: she must also add the band practice she misses, which has a cost of its own as well
5. 4.

   Jun asks how much better off Mari is with tutoring than with her next-best choice for the six hours. Which answer fits the table?

   • $162 better off, the pay from tutoring and yard work together
   • $18 better off: $90 from tutoring against the $72 that yard work would pay
   • $90 better off, the full pay from six hours of tutoring at $15 an hour
   • $72 better off, the pay from yard work that she gives up by choosing tutoring

6. Use this

   Lemonade batches (10 cups each) (example figures, made up for practice). Columns: Batches, Total cost, Total sales. 1, $12, $20; 2, $22, $40; 3, $34, $60; 4, $50, $80; 5, $72, $100. Each batch sells for $20. A $15 sign was bought yesterday; it is not in the costs. The rule: make one more batch only while its extra sales are above its extra cost.

7. 5.

   The $15 sign is already paid for. Luz says a 5th batch would help earn it back. Which reply is best?

   • Yes: the sign makes each batch more worthwhile, so profit is higher with five batches
   • No: the sign is paid either way, and the 5th batch adds $22 in cost for $20 in sales
   • Yes: she should keep making batches until the $15 for the sign is earned back
   • No: the $15 should be added to the 5th batch's cost, which would make it cost $37
8. 6.

   Milo compares four batches with five. Which statement about profit does the table support?

   • Four batches earn $30, but the table gives no way to tell what five batches would earn
   • Four batches earn $26 and five earn $30, so profit is still rising at five
   • Four batches earn $30 profit and five earn $28, so the extra batch lowers profit
   • Four batches earn $80 and five earn $100, so the fifth batch raises profit
9. 7.

   Zee says the average cost for five batches is $13.20, below the $20 each batch sells for, so make five. Noah replies. What is the best reply?

   • Sound: sales rise with each batch, so a fifth batch cannot lose any money
   • Sound: when average cost is below the selling price, each added batch earns a profit
   • Not sound: the rule compares the next batch's cost, $22, with its sales, $20
   • Not sound: average cost is $13.20 just if the $15 sign is counted, and it is not

10. The town's three projects (example figures, made up for practice)

    Project	Cost	Survey score (points)
    Library hours	$60,000	70
    Road repair	$50,000	65
    Park lights	$40,000	40

    The town has $100,000 and can pay for any projects whose costs fit. Scarcity means wants are greater than the resources available. A shortage means that at the market price buyers want more than sellers offer.

11. 8.

    Pia wants the set of projects that gives the town the most survey points within its $100,000. Which set is it?

    • Library hours alone, since it has the highest score of the three projects
    • Road repair and park lights, since together they cost least and total 105 points
    • Library hours and park lights, which fit the budget and total 110 points
    • Library hours and road repair, the two highest scores, for 135 points
12. 9.

    A caller says the town has a shortage because it cannot fund all three projects. Tala checks the definitions. Which answer fits?

    • It is a shortage: the projects are priced at their cost, and buyers want more than sellers offer
    • It is a shortage: anyone who cannot get what they want faces a shortage of it
    • It is neither, since scarcity applies to goods that people buy in a market
    • It is scarcity: wants exceed what the town can pay for, with no market price involved
13. 10.

    A resident says the scores prove each resident values library hours more than park lights. Zee tests the claim. What is the verdict?

    • Supported: the library costs more, so it must be worth more to the residents who vote
    • Supported: 70 is greater than 40, so each resident ranks the library above the park lights
    • Not supported: scores are survey results, so some residents may value park lights more
    • Not supported: survey scores cannot be used to compare projects in any way at the town level