Read this section to encounter the three fundamental questions that economists face and to learn about opportunity costs. Attempt the problems presented in the "Try It" section, and note how eventually every decision boils down to choosing between competing alternatives.
Identify the elements of scarcity, choice, and opportunity cost in each of the following:
- The Environmental Protection Agency is considering an order that a 500-acre area on the outskirts of a large city be preserved in its natural state, because the area is home to a rodent that is considered an endangered species. Developers had planned to build a housing development on the land.
- The manager of an automobile assembly plant is considering whether to produce cars or sport utility vehicles (SUVs) next month. Assume that the quantities of labor and other materials required would be the same for either type of production.
- A young man who went to work as a nurses' aide after graduating from high school leaves his job to go to college, where he will obtain training as a registered nurse.