The build a better school and build

The scarcity mean that we must give up one alternative in order to select another. The resources are limited, such as land and oil; but our wants and desires for the things that we can produce with those resources are unlimited. For example, we want to develop a better school to improve the education, develop the houses for better residence and build a factory for production purpose; but with the limited space of land, we cannot develop all of this building according to expectation. We have to make a choice either we build a better school and build a small factory or we build a large factory and build a school with small size. Thus, scarcity is the condition of we have to make a choose among all alternatives.

The choices are the alternative that we have. For example, the government have a piece of land which want to develop in order to benefit the people, the government have many options to choose, the government can choose to build a hospital or school or police station or library on that land, with limited land, the government have to make a choice among all these choices. Every choice has an opportunity cost and the opportunity costs affect the choices people make. Meanwhile, the choices involving opportunity costs may be related to your career. Choose a job instead of another job, you may get an opportunity, while you lose another job.

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The opportunity cost is the value of the best alternative that had to be forgone in making that choice. For example, if John had chosen to spend RM15 at gym, at the same time, he has chosen to give up the benefits of spending the RM15 at McDonalds’s burger or watching movie at cinema or buy a T-shirt from shopping mall. If the burger is the most valuable of those alternatives, then the opportunity cost of the gym is the value of the enjoyment you are expected to receive from the burger.

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