How does the problem of relative scarcity interrelate with the concept of opportunity cost?
Unless I’m mistaken, scarcity is the raison d’etre of the opportunity cost. Opportunity cost: ►…is the cost incurred (sacrifice) by choosing one option over the next best alternative (which may be equally desired). Thus, opportunity cost is the cost of pursuing one choice instead of another. Every action has an opportunity cost. For example, someone who invests $10,000 in a stock denies oneself the interest that one can easily earn by leaving the $10,000 dollars in a bank account instead. Opportunity cost is not restricted to monetary or financial costs: lost time, pleasure or any other benefit that provides utility should also be considered. Opportunity cost is a key concept in economics because it implies the choice between desirable, yet mutually-exclusive results.◄ So, why do we have to make choices in the first place? Why can’t we have the $10,000 in the bank and another $10,000 in the stock market at the same time? The answer is scarcity. Economics is about the allocation of re
