How scarcity force society to incur opportunity cost?

Answer 1

This is the basic economic problem:

Infinite Wants--> Finite Resources--> Scarcity-->Choice--> Opportunity costs

So the problem is: How can we allocate resources efficiently, knowing that they are an infinite number of wants (but fewer needs) and there are only a limited amount of resources, which are scarce.

Because there is scarcity (deficit/lack of supply of resources), people are left with a choice: That choice is an opportunity cost. Opportunity costs is the cost/disadvantage that occurs from choosing the next-best-alternative because of scarcity.

an example: the government wants to build a new highway, but ther land is scarce( there is not enough land), and so, the opportunity cost is to build a new public school. The opportunity cost is the efficiency and accesibilty of transportation. The next-best-alternative is usually chweaper but is in less quality/quantity than the initial good or service.

So basically, because of scarcity, consuimers and producers have to make a choice: whose wants need to be satisfied? what is more important?