Question

Ezra runs a gyro stall at the local farmers' market. He would like to expand and open his own shop downtown. He has made the chart above, listing some potential costs and benefits of expansion. Item 3 under Costs best illustrates which concept?A. Businesses must grow to stay competitive.B. Fluctuations in demand cause fluctuations in supply. C. Labor shortages drive up business costs.D. Scarcity of resources necessitates economic choices.

Answer 1

Additional information:

COSTS                                                 BENEFITS

1. Hire more workers                          1. Set own hours of operation

2. Take on more operations costs    2. Have more space and control over                                                      .                                                              appearance.

3. Divide time between market         3. Serve more customers

and shop—or close stall at market  

4. Accept more financial risk             4. Make and sell more food items

Answer:

Economic choices result in trade-offs.

Explanation:

Ezra realized that he cannot be at two places at the same time, so he has three options:

1. divide his time between the market and the new shop
2. close the market store
3. hire employees that can work on the market store (*I'm collaborating with Ezra by proposing this third solution)

Ezra's dilemma represents a basic economic principle: resources are scarce and any decision made results in a trade off.

A better example, when you want something done, it can either be:

• a good high quality service that is finished very quickly, but it is also expensive.
• a good high quality service that is done at a low cost, but it takes a long time to be completed.
• an inexpensive service that is completed very quickly, but it is a low quality service.