• Scarcity & Choice

    If you could have anything in the world what would you get? A new video game, an iPad, a swimming pool, your very own elephant? Sadly, these things cost money and you may not have enough to purchase these things or enough space to put a pool and an elephant. This difference between what you want and what you can actually have is called scarcity. 

    Let us say you get a $20 allowance every week and you make the decision to budget $4 each day to buy snacks in school. You go to the parlour at recess time and look at what is for sale:

    You can buy whatever you like with this money – once it costs $4 or less – but you cannot afford everything you may want. This scarcity of money means that you have to make a choice about what you are getting. It also means that by choosing one thing you are giving up the chance to buy something else. So you can buy an aloo pie, a lollipop and a soft drink or even eight mints but you cannot buy a soft drink and a aloo pie because you just don’t have enough money for that.   

    I really want an ice cream. There are several choices I can make, I can:

    1. Forget the ice cream and buy something that costs $4, like an aloo pie

    2. Save all my money and get the ice cream another day

    3. Buy a pack of corn curls and save the rest of my money so I can get the ice cream tomorrow.

    4. Save all my money and put it towards getting a new video game I want

    I think I will go with option #3 since it means I get a snack today and the ice cream I want tomorrow.  What choice would you make?

Share This