Cost Opportunity Principles of Economics
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Opportunity Cost Principles of Economics
Introduction
In this article the opportunity cost principles of economics are greatly explored. Resource scarcity in economics is one of the most basic concepts. Trade offs are necessitated by the resource scarcity, and opportunity costs come out or result from the trade offs. Even though, mostly the services or goods costs are viewed or thought of in terms of money. The decision opportunity cost is based on the next best alternative or what must be given up as a result of the decision made. An opportunity cost involves any decision that entails a choice or decision between two or more options. Optional decisions mostly based on needs and wants are valued in strategic way that all choices made offer opportunities in cost, this in turn affect the choices people make. Any choice opportunity cost is the best alternative value that in making the choice had to be foregone. With this overview, this article will address the following questions pertaining to opportunity cost in an essay form.
The approximate tuition and other fees dollar cost associated with taking this economics course is roughly $250.00 a semester hour or $1000 a course. When it comes to determining whether the opportunity cost of taking this course is fully reflected in the dollar cost, the answer would definitely be a yes. Since, I am active most of the time due to the military duty; I get my classes paid for by tuition assistance. Even after getting the yearly $4500 given by the school is spent, the costs of continuing my education, even if paying out of pocket is still beneficial since it supports my opportunity cost of taking college courses. In the time I used to take the courses in college, I would have rather applied the opportunity costs. Time is the hardest thing to make due to my busy schedule especially since it involves making room for the courses. The main advantages that come with the opportunity costs of talking the courses and getting the degree in college, include getting higher chances of better paying jobs (Rittenberg and Tregarthen, 2009).
Preservation and conservation of land would be some of the initiatives that would be included to the already implemented opportunity cost of preserving part of northern Canada by prohibiting any heavy crude oil extraction. This can be explained simply by the logic that since there would be no excavation or drilling on the lands. There would then be no sludge or chemicals that would ruin the lands resources. If looked from another perspective, other than microeconomics, the unpolluted lands would be beneficial still to the Mikisew Cree tribe people, who due to the potential abundance of natural resources they would be able to survive in the environ. The cost of engaging in the excavations is steep and in turn it still adds to the creation of green house gas in the environment. It is evident that alternate means of mining or attaining the heavy oil should be found and implemented instead of the currently implemented excavations and fracking for the oil which do more harm than good to the environment.
Increase in the quality or in the increase in the physical quantity of the way things are available or are made accessible to a technological or economical gain will allow for more production of services and goods in the economy. The economy’s production possibility curve will shift outwards. Economic growth is whereby there is a process in which an economy can attain in its production possibilities an outward shift. The main advantage that these change present include there being not only more jobs opportunities for all but also better prices in the economy.
Examples of some of the factor that can affect the possibilities of production frontier include; changes in productivity factor, either capital or labor. Productivity of capital, labor or land can be influenced by many things. One both labor and capital can be decimated by war; environmental damage is another issue, as shown in the U.S during the 1930s dust bowl, which extensively impacted on agriculture or its effects in sub-Sahara Africa. Another example is like the 1970s and 60s misguided economic policies as in the case of South America. In the poor countries economic development debates at that time, there existed two divergent schools of thoughts (Frederick, Novemsky, Wang, Dhar & Nowlis, 2009).
The Asian economies side mainly believed that through centralizing on productivity in industries which they were strongest they would develop faster and that is what they implemented. The other camp mainly that of the South American economies, instead chose to follow the option of implementing the path of import-substitution, whereby they mainly focus their own economies in producing many different things from jets to food, while subsequently discouraging other countries imports. To make the path of import-substitution work, they were forced to operate and invest in areas where their production was not very efficient; this drastically affected their possibilities of production frontier possibilities.
The EU output has been positively affected by the removal of the trade barriers. In that through the elimination of restrictions and boarders, free trade between countries has been allowed, that is similar to the free trade between states in the U.S. Countries can also benefit from this trade since they can now move their products much easier, between the borders. Another fact is that with the laxity in the rules the countries can now trade much better as in those with agriculture can come learn from those with technology and vice-verse, with this the economic growth within the E.U countries develop at similar rate.
Conclusion
If economists consider opportunity cost to be one of their most valued gifts globally, able to achieve much good in peoples public and private lives, then the inaction opportunity cost is bigger. An alternative however, has been proposed that puts the whole concept in a different dimension. Opportunity cost has always been perceived as being difficult concept, not a fundamental but either an optional or subsidiary concept. That actually needs a much deeper grasp of the concept, but in actuality it’s not a guarantee for success in the economics career.
Reference
Frederick, S., Novemsky, N., Wang, J., Dhar, R., & Nowlis, S. (2009). Opportunity cost neglect. Journal of Consumer Research, 36(4), 553-561.
O’Donnell, R. (2009). THE CONCEPT OF OPPORTUNITY COST: IS IT SIMPLE, FUNDAMENTAL OR NECESSARY?. Australasian Journal of Economics Education, 6(1), 21-37
Rittenberg L. and T. Tregarthen (2009). Chapter 1: Economics: The Study of Choice. Principles of Microeconomics.
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