People acting individually or collectively through government must choose which methods to use to allocate different kinds of goods and services. Discuss rationing - relate to scarcity and choice. Define opportunity cost. Develop examples to illustrate the characteristics of cost. To the decision-maker, the relevant value of something is its marginal value.
Prices reflect opportunity costs and help buyers make decisions.
Cost and price are not the same, in economics terms. All other things being equal, they will choose to buy less. They will choose to buy more. Law of Demand. Prices reflect opportunity costs for suppliers, too.