Scarcity and opportunity cost in our daily life.

-what is scarcity?

Scarcity is a presumption that human wants are unlimited but resources aren’t. Scarcity arise because human desire more than resources can provide. So there is something called opportunity cost which means something you have to forgo to achieve something else when you desire both at the same time.

For example: After a wonderful soccer match, you’re very dehydrated as well as you’re hungry but you only have rm3 currently. You have to choose to spent rm3 on a bottle of drinks or a packet of nasi lemak. If you forgo nasi lemak for a bottle of drinks, hence that packet of nasi lemak is the opportunity cost.

-Indirectly we are applying economic term into our daily life.

In a real life scenario, we can take Singapore as a good example of scarcity because the land they have are limited and now they’re digging holes for underground to built more houses and shop lots that would go down about 30 storeys . “We already have underground train stations and malls, and there are already many buildings here that take advantage of spaces below ground so the real questions are how much time will one spend underground, what goes on there, and how far down from natural light and fresh air.” Says from a Singaporean. So many part of out life we faces scarcity and we have to make choices in order to proceed to the next step. Not only the underground is a scarcity for them, they even bought a huge amount of sands to expand their country. Marina Bay Sands is previously not a land but sea. They make choice and decided to use resources to fulfill their proposal.

-We faces scarcity everyday.

-We have to choose either only one goods or services and have to forgo the other goods or services.

-People think rationally before making a decision in daily life.

-This happens in firm as well when they have to make decision on which proposal to choose.

-People look for the highest perceive value.

In my opinion, making choice is always a problem in our daily life but we have to forgo something to enable us to achieve one another, this is known as opportunity cost. With this concept, we are able to achieve the highest value to satisfy ourselves.

References:
 http://newsinfo.inquirer.net/363211/land-scarce-singapore-looks-underground-for-space#ixzz2Yklb3y27