How is scarcity and choice link in economic?

Answer 1

scarcity is limitedness which leads to choice making whereby One good or service is chosen which leads to opportunity cost. The alternative foregone is opportunity cost.

"Opportunity cost" is when you forego or give up one thing that you want to get something else that you believe you want even more.

In your personal life, let's say that you can afford EITHER a candy bar OR an ice cream bar; you CANNOT have both. When you select the ice cream, the candy bar that you can't have is the "opportunity cost".

In business, things work pretty much the same way, but on a much larger scale. I work for a business that sells and services copiers and business machines. We're going to expand! I can EITHER afford to hire more technicians, OR I can afford to open a new sales office in the next city over. I cannot do both, RIGHT NOW. Do I hire more techs and give my existing customers better service, or do I grow my business by opening another sales office and hiring some salesmen? The choice that I do not make is the "opportunity cost".

Answer 2

Both opportunity costs and scarcity choice requires choices. With each situation you give up an option by choosing the option you want.