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?

   • Yard work, her second choice, for the same six hours
   • 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
   • 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
   • The movie ticket falling to $5, since a cheaper movie makes her fourth choice more tempting
   • Yard work paying $18 an hour, since her best alternative would then be worth more
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: 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
   • Right: opportunity cost counts only money spent, and tutoring costs her no money

5. 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.

6. 4.

   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
   • No: the $15 should be added to the 5th batch's cost, which would make it cost $37
   • Yes: she should keep making batches until the $15 for the sign is earned back
7. 5.

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

   • Four batches earn $80 and five earn $100, so the fifth batch raises profit
   • Four batches earn $30, but the table gives no way to tell what five batches would earn
   • Four batches earn $30 profit and five earn $28, so the extra batch lowers profit
   • Four batches earn $26 and five earn $30, so profit is still rising at five
8. 6.

   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?

   • Not sound: average cost is $13.20 just if the $15 sign is counted, and it is not
   • 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

9. 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.

10. 7.

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

    • Library hours and road repair, the two highest scores, for 135 points
    • 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
11. 8.

    The town funds the library and the park lights. Ren asks for the opportunity cost of that choice. Which answer fits?

    • 110 points, the survey total of the projects that the town does choose
    • 65 points, the road repair alone, since it is the project left unfunded
    • 105 points, the road repair and park lights bundle that the same money could buy
    • 175 points, the three survey scores summed as the cost of making any one choice
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 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
    • 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
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: 70 is greater than 40, so each resident ranks the library above the park lights
    • Supported: the library costs more, so it must be worth more to the residents who vote
    • Not supported: survey scores cannot be used to compare projects in any way at the town level
    • Not supported: scores are survey results, so some residents may value park lights more