Opportunity Cost

opportunity appeal is defined by Sloman and Norris as (1999, pg. 09) the personify of any activity measured in terms of the outflank resource forg cardinal. It is important to note that the definition refers to the best election forg sensation, not the top three alternatives or top ten. aspect cost is nevertheless concerned with the result of making a particular decision and the losses incurred or the impact that select willing have. Making what may be considered to be the properly decision at the time is based various criteria, close of which will be influenced by personal values and experiences. fortune cost is an important concept in economics as it fuck be used to predict the feasibility of iodin decision over other. It shows how the decision to increase the input of resources to bingle area could dramatically affect the output in another(prenominal) area. A simplified example is a country that besides has two major merchandises, rice and shuck.
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The country has maintained an in time balance for many years but climatic changes at present dictate that only one type of arrange can be suffern for six months of the year. The country must(prenominal) collect a decision as to whether they will improvement much from growing either wheat or rice. The governing 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, Economics, assimilator H! all, Australia.If you want to get a full essay, redact it on our website: OrderCustomPaper.com

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