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1. Scarcity being the central economic problem is defined as the inadequacy/insufficiency/inability of (economic) resources or goods and services available to satisfy them. Scarcity is therefore not the same as „few? resources. Since resources are scarce (limited in supply) it implies that such resources have alternative uses and command a non-zero price; thus, scarce resources are known as economic resources and goods and services made available (produced) by utilizing such resources are referred to as economic goods and services. A resource be it land, capital, labor or entrepreneurial ability, can be put to alternative uses (used to satisfy a variety of human wants eg. in terms of land, a plot can be used for various purposes with a view to satisfying wants on it, one can construct residential houses, commercial buildings, an educational center or farming.
2. Choice is (may be) defined as the power of discretion that is the ability and freedom to select from alternatives; choice arises due to scarcity of resources with such resources having alternative uses and therefore cannot satisfy all human wants pertaining to them at the same time. Choice is made between alternatives depending on scale of preference which differ
between an individual consumer, producer (firm/investor) or government determined by the view to maximize satisfaction, return and equity on provision (especially) of public and merit goods respectively. A rational consumer chooses those goods (and services) from which maximum satisfaction is derived; for an investor, choice is made of those ventures which yield
the highest possible return at least costs; a government that embraces the dictates of good governance would seek to ensure equity in distribution of resources by prioritizing between alternatives, for instance choosing to spend more on public and merit goods (such as defense/law and order and education and health respectively).
3. Opportunity cost of an action is the value of the benefit expected from the next best foregone alternative. It?s a derivative concept which arises due to the scarcity of resources (for production) or goods and services (for consumption) which necessitates the making of choice between competing alternative uses where more of a commodity is produced or consumed by reducing the production or consumption of another. From the standpoint of an entrepreneurial ability, the opportunity cost of deciding to organize land, labor and capital in the manufacture of fertilizer in a factory is the value of organizing the same resources in establishing and running a (private) school; the opportunity cost of choosing to be a doctor is the value of the benefit forgone by not being a lawyer.
Wilfykil answered the question on February 7, 2019 at 10:53
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