Scarcity

Resource allocation

Economic systems

Specialisation

Productivity

Opportunity cost

MYP Individuals & Societies Scarcity Notes

How Are Choices Forced When Wants Are Unlimited?

Even when a resource seems abundant, it is still finite when compared with what people could potentially use.

This is the central idea of scarcity.

Where poverty is a condition where people lack sufficient income or access to essentials, scarcity is broader.

It exists in every society, including wealthy ones, because there is always a limit to time, labour, materials, and technology.

Definition

Scarcity

The idea that available resources (land, labour, capital, entrepreneurship) are limited and unable to satisfy unlimited human needs and wants.

Example

A country may have plenty of land, but not all land is fertile; it may have many workers, but not all have the right skills; it may have money, but not enough to fund every possible project.

Analogy

Think of scarcity like a school timetable.
Even if your school has many teachers and classrooms, you cannot schedule every student to take every subject at the same time.
Limited slots force trade-offs.

Opportunity cost is the price of choosing

Definition

Opportunity Cost

Opportunity cost is the value of the next best alternative that is forgone when a decision is made to pursue one option over another. It reflects the benefits that could have been obtained if a different decision or investment had been chosen.

Because we can't do everything, every decision has an opportunity cost.

If a government spends more on road-building, it may have to spend less on healthcare.
If a firm uses steel to make cars, it cannot use that same steel to make trains.

Opportunity cost matters because it makes choices visible.

It encourages better questions, such as:

What are we giving up?
Who benefits and who loses?
Are we using resources in a way that matches our priorities?

Common Mistake

Opportunity cost is not always money.
It can be time (studying instead of working), land (a park instead of apartments), or environmental quality (production instead of clean air).

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Note

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Tip

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How Are Choices Forced When Wants Are Unlimited?

Even when a resource seems abundant, it is still finite when compared with what people could potentially use.
This is the central idea of scarcity.
Where poverty is a condition where people lack sufficient income or access to essentials, scarcity is broader.
It exists in every society, including wealthy ones, because there is always a limit to time, labour, materials, and technology.

Definition

Scarcity

The idea that available resources (land, labour, capital, entrepreneurship) are limited and unable to satisfy unlimited human needs and wants.

Example

A country may have plenty of land, but not all land is fertile; it may have many workers, but not all have the right skills; it may have money, but not enough to fund every possible project.

Analogy

Think of scarcity like a school timetable.
Even if your school has many teachers and classrooms, you cannot schedule every student to take every subject at the same time.
Limited slots force trade-offs.

Opportunity cost is the price of choosing

Definition

Opportunity Cost

Because we can't do everything, every decision has an opportunity cost.
1. If a government spends more on road-building, it may have to spend less on healthcare.
2. If a firm uses steel to make cars, it cannot use that same steel to make trains.
Opportunity cost matters because it makes choices visible.
It encourages better questions, such as:
1. What are we giving up?
2. Who benefits and who loses?
3. Are we using resources in a way that matches our priorities?

Common Mistake

Opportunity cost is not always money.
It can be time (studying instead of working), land (a park instead of apartments), or environmental quality (production instead of clean air).

What Are Factors of Production?

Definition

Factors of production

All resources or inputs used to produce goods and services.

They are essentially the inputs scarcity limits.
The four factors of production are:

MYP Individuals & Societies Scarcity Notes

How Are Choices Forced When Wants Are Unlimited?

Opportunity cost is the price of choosing

What Are Factors of Production?

anim nostrud sit dolore minim proident quis fugiat velit et eiusmod nulla quis nulla mollit dolor sunt culpa aliqua

Duis aute irure dolor in reprehenderit

Excepteur sint occaecat cupidatat non proident

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How Are Choices Forced When Wants Are Unlimited?

Opportunity cost is the price of choosing

What Are Factors of Production?

anim nostrud sit dolore minim proident quis fugiat velit et eiusmod nulla quis nulla mollit dolor sunt culpa aliqua

Duis aute irure dolor in reprehenderit

Excepteur sint occaecat cupidatat non proident

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Social Groups and Human Interaction4 subtopics

Origins of Empires4 subtopics

Structures and Functions of Empires5 subtopics

Decline and Collapse of Empires4 subtopics

Human Impacts on Natural Environments4 subtopics

Population Change and Social Effects6 subtopics

Urban Systems and Sustainable Management4 subtopics

Economic Decision-Making and Production6 subtopics

Trade, Fairness and Global Exchange4 subtopics

Development and Standards of Living4 subtopics

Sustainable Use of Earth’s Resources4 subtopics

Historical Perspectives and Changing Worldviews3 subtopics

MYP Individuals & Societies Scarcity Notes

Social Groups and Human Interaction4 subtopics

Origins of Empires4 subtopics

Structures and Functions of Empires5 subtopics

Decline and Collapse of Empires4 subtopics

Human Impacts on Natural Environments4 subtopics

Population Change and Social Effects6 subtopics

Urban Systems and Sustainable Management4 subtopics

Economic Decision-Making and Production6 subtopics

Trade, Fairness and Global Exchange4 subtopics

Development and Standards of Living4 subtopics

Sustainable Use of Earth’s Resources4 subtopics

Historical Perspectives and Changing Worldviews3 subtopics

How Are Choices Forced When Wants Are Unlimited?

Opportunity cost is the price of choosing

What Are Factors of Production?

anim nostrud sit dolore minim proident quis fugiat velit et eiusmod nulla quis nulla mollit dolor sunt culpa aliqua

Duis aute irure dolor in reprehenderit

Excepteur sint occaecat cupidatat non proident

Unlock the rest of this chapter with a free account

How Are Choices Forced When Wants Are Unlimited?

Opportunity cost is the price of choosing

What Are Factors of Production?

anim nostrud sit dolore minim proident quis fugiat velit et eiusmod nulla quis nulla mollit dolor sunt culpa aliqua

Duis aute irure dolor in reprehenderit

Excepteur sint occaecat cupidatat non proident

Unlock the rest of this chapter with a free account