Q1: Explain the concept of scarcity, choice and opportunity cost when you are deciding whether to set up the Yoghurt ice cream stall.

cost of any action/decision measured in terms of the highest valued alternative forgone

Going to university

Opportunity Cost: Not being able to set up Yoghurt Store to reap tangible benefits such as income from the sale of Yoghurt.

Setting up a Yoghurt store at AMK

Opportunity Cost: Not being able to go to University to have a better education which may translate into future employment opportunities et al.

Situtation whereby limited resources available are unable to satisfy the unlimited human wants.

Capital of Setting Up Yoghurt Store

In view of the issue of scarcity, a choice has to be made
to allocate scarce resources so as to maximise the satisfaction of the most wants

What to produce?

Ice-cream yogurt

How to produce?

Capital-intensive

Large use of yoghurt machines to
make ice-cream yoghurt.

For whom to produce?

Higher income Singaporeans

Consumers with changing tastes and preferences -
ice cream yoghurt is the healthier choice compared to
other types of dessert.