Марина » 28.11.2013, 20:22
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Opportunity cost is a fundamental concept of economics. Opportunity
cost is the economic cost of using scarce resources in terms of the alternatives
elsewhere. This concept is of value for all economic choices. In every choice
the person has to take one action rather than others. For each choice, the
person compares the benefits and costs of each alternative and tries to get the
maximum benefit.
Benefits are usually clearly seen. The person can feel satisfaction because
he buys a car, a meal, a concert, or even a year at college. But costs are more
difficult to see. The true economic cost - the opportunity cost may be not
the same as the simple expression in money terms because there are other
real costs.
The other real costs are often hidden, or indirect. They include things,
material and immaterial, the person cannot get because he gets something else.
For example, with just two days before exams, you can only study economics
and raise your course grade from В to A, or only chemistry and raise
ttat grade from С tr> A The opportunity cost of an A in chemistry is getting a
В in economics rather than an A.
Your parents bought a house for $20,000 some years ago. They can sell it
for $45,000 now. The cost of their staying in the house now is $20,000. The
opportunity cost is $45,000. Your parents stay in the house and do not get
$45,000.