Scarcity - Explore Economics Video Series

Ms. Meszaros: Class, we have something important to talk about today.

Thomas: What is it, Ms. Meszaros?

Ms. Meszaros: You all know there’s an empty lot next to our school. You can see it out our window.

Hanna: Yes, we can. Who owns that land?

Ms. Meszaros: Well, the school owns the land, and the school board has been trying to decide what to do with it. We need more parking space, but we need a larger playground space, too.

Cameron: We want the playground, right everyone?

Ms. Meszaros: Well, it was a hard choice for the school board. Land is scarce, you know?

Thomas: What does scarce mean?

Cameron: Remember, we talked about it in economics. It means there isn’t enough land for us to have everything we want.

Ms. Meszaros: That’s right, Cameron. Land is a scarce resource. And, the school board wanted more parking and a larger play area, but they only have enough land for one of those two things. They decided that they want to use the land to provide more play area.

Class: Yeah!

Ms. Meszaros: Yes, this is exciting. When things are scarce, people must make choices. The school board chose to have a larger playground. They gave up additional parking space. Remember when we make a choice, the next best thing we give up is our opportunity cost. The next best thing the school board gave up was having a parking lot. That’s their opportunity cost.

Ms. Meszaros: Now, we have another problem. What equipment should be on the playground? What kind of playground should it be? I think that’s a problem we should think about.

Ms. Meszaros: What are some things you’d like to see on a new playground?

Students call out: swings, slides, climbing ropes, four-square play area, basketball hoop, bridge, seesaw, monkey bars, tubes, sandbox, merry-go-round, space for a four-square court

Ms. Meszaros: That's a lot of stuff. I think that we have unlimited wants for the playground. I’m not sure how much of what we want we can actually have. The land is scarce!

Hanna: That means we do not have enough space for everything!

We need to measure so that we can find out the area of the land. Right?

Cameron: Yes, we learned about area in math class.

Thomas: Yes, I remember that. We’ll need a long tape measure. Maybe the custodian can help with that.

Ms. Meszaros: While some of us are measuring the land, others can search online to find out how much space is needed for the things on our list of wants. For example, how much space is needed for a cool slide and how much space is needed for a four-square court?

Ms. Meszaros: Great job everyone! Now we have measured the land and we’ve found out how much space each of our playground wants will take. What do you think?

Thomas: I think we have a scarcity problem.

Cameron: Darn, that means we can’t have everything we want for the playground.

Hanna: We’ll have to choose which things we want.

Thomas: And, the next best thing’s we give up will be our opportunity costs.

Cameron: That’s right, Thomas.

Ms. Meszaros: You are all correct. Remember, our wants for goods and services are unlimited but the resources we need to produce goods and services are limited. That means there’s scarcity, and we must make choices. When we choose, we give something up. The next best thing we give up is our opportunity cost.

Cameron: We have lots of information to help us make choices.

Ms. Meszaros: The kids shared their ideas for the playground with the school board. The school board recognized the scarcity problem and made some choices based on the information the kids provided. And now there’s a beautiful new playground.