Practice Problems: have 20 to spend. You can buy a new video game or go to the movies with friends. What is the opportunity cost of buying the video game? 2. Explain how scarcity influences your daily choices. 3. Identify the factors of production involved in making a pizza.(At least 3 of each) Human Resource- Natural Resource- Capital Resource- 4. What are the potential risks and rewards of being an entrepreneur?

##Step 1: Defining Opportunity Cost<br />###Opportunity cost is the value of the next best alternative forgone when making a decision. In this case, the opportunity cost of buying the video game is the enjoyment and social interaction of going to the movies with friends.<br />##Step 2: Scarcity and Daily Choices<br />###Scarcity, the limited nature of resources compared to unlimited wants, forces us to make choices daily. We constantly weigh options based on our limited time, money, and energy. For example, choosing to study instead of watching TV reflects prioritizing academic goals due to limited time.<br />##Step 3: Factors of Production for Pizza<br />###Human resources include the chef, cashier, delivery driver. Natural resources include the water for the dough, tomatoes for the sauce, and wheat for the crust. Capital resources include the oven, pizza cutter, and cash register.<br />##Step 4: Risks and Rewards of Entrepreneurship<br />###Risks of entrepreneurship include financial loss, long working hours, and the possibility of business failure. Rewards include potential for high profits, independence, and the satisfaction of creating something new.<br /><br />#