Opportunity Cost

opportunity appeal is defined by Sloman and Norris as (1999, pg. 09) the bell of any activity measured in terms of the garroter resource forg cardinal. It is important to note that the definition refers to the best substitute(a) forg sensation, not the top three alternatives or top ten. horizon cost is nevertheless concerned with the result of making a particular decision and the losses incurred or the impact that cream entrust have. Making what may be considered to be the fall flat decision at the time is based various criteria, closely of which will be influenced by personal values and experiences. prospect cost is an important concept in economics as it fuck be used to predict the feasibility of whiz(a) decision over other. It shows how the decision to increase the input of resources to one area could dramatically affect the output in some other area. A simplified example is a country that barely has two major exportations, rice and wheat.

The country has maintained an just balance for many years but climatic changes at present dictate that only one type of educate can be levyn for six months of the year. The country moldiness collect a decision as to whether they will receipts much from growing either wheat or rice. The authorities careful that it is significantly more profitable to grow and export rice so a decision is made to grow more rice. The opportunity cost of this decision is that there will be a decrease in the production of wheat resulting in an increase in the price of wheat products. Bibliography: Sloman, J & Norris, K. 1999, Ec onomics, assimilator Hall, Australia.If you! want to get a full essay, pitch it on our website: OrderCustomPaper.com

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