Recognize scarcity as the basic economic problem: limited resources facing competing wants and uses. Sort examples into resources, goods, services, and free goods, and distinguish scarcity from a temporary shortage.

Trace a decision from options to the one forgone alternative that matters most. Practice separating opportunity cost from the money price, from every possible tradeoff, and from sunk costs that should not affect the choice.

Apply the previous explanations in a guided problem.

Read a production possibilities frontier as a model of scarcity, feasible choices, efficiency, and unattainable combinations. Use points and movements on the frontier to identify what must be given up and why opportunity costs can rise as production shifts.

Compare how opportunity cost appears in household, business, and government choices. Reason through implicit costs, economic versus accounting cost for firms, and why public policies still require giving up time, money, resources, or alternative goals.

Apply the previous explanations in a guided problem.

Check your understanding with a short quiz.

Review this chapter with practice based on your mistakes.