PAPER #1 Economic Principle: Scarcity -- How it forces us to make choices which result in opportunity cost. Page 1 In your own words (don't quote the text), explain as completely as you can what an economist means by scarcity and opportunity cost. How do the 2 concepts relate? Link them. What do resources have to do with this? Are scarcity and shortage the same? Explain. What do economists mean when they cite opportunity cost and what's the connection between opportunity cost and scarcity? Why does economic theory argue that we can't "have it all"? Organization and a logical development is important. You cannot afford to use long winded examples here in the limited space. Choose your wording wisely see paper tips for specific questions that need to be answered. Page 2 Select 2 goods or services you produce. (IT MUST PERTAIN TO PRODUCTION, Not Consumption ) that is very important to you and explain how scarcity forces you to make choices. What is the opportunity cost of producing each good. Keep in mind the economic definition of opportunity cost and answer in that context. These need to be expressed in relative prices. Also this section needs to include the resources you utilize in the production of each good, service or resource chosen and to categorize them as well. Page 3 Graph. Draw a production possibilities curve (PPC) to graphically show the personal trade-offs you described on page 2. Title must include: your name, the 2 products, the time period of production. All axis must be labeled and indicate proper units of measure. Remember that you're graphing 2 "GOODS" -- in other words, you should have some desirable output on each axis, NOT the scarce resources/input (i.e., your labor). The graphs you attach to your papers can be computer-generated or hand-drawn. If you hand-draw your graph, it must be drawn on graph paper. In either case, your graph should be neat, correctly composed, and completely labeled. Go to the "How to..." folder to see how to draw graphs in Word