Opportunity cost is an essential concept to understand when studying Economics. Opportunity cost consists of everything that you give up when you make an economic decision. It exists in nearly every decision that presents itself and is clearly evident in Able 's decision in "I Knew a Guy Once" to remove Wheeler 's 'rules ' from the door, the growth of the Shenzen people from a population of zero to over 9 million in 30 years, and in my decision to take this class. In all of these cases, the decision-makers had to first consider opportunity cost before making their decisions. In "I Knew a Guy Once", by Tanya Huff, Able makes many decisions that dramatically change the way the bar runs. Among these wild changes, Able decides to take down the …show more content…
In roughly thirty years, the city grew from a small fishing village in China to a world leader in global trade and commerce. When considering opportunity cost and how it relates to the boom of Shenzen, it is essential to first consider how much money and manpower it took to create the massive complex of buildings and companies that makes up Shenzen. The billions of dollars that were spent creating Shenzen, along with the thirty years it took to blossom, could have been spent on many different things. The opportunity cost of such an example includes everything that could have been achieved with the resources that were used to establish Shenzen as a world class trading city. World poverty could have been eradicated or perhaps world hunger, or nearly else could have been done with these resources. However, whoever decided to spend their resources on building the modern Shenzen, perhaps the residents of Shenzen or the companies that were responsible for the explosion of the city, decided that the benefits of globalizing Shenzen were more appealing than any of the alternatives. However, it is unlikely that the people who made this decision thought about options such as eradication world poverty because they were focused on world trade and modernization of a small fishing
A cost-benefit analysis is “whenever people decide whether the advantages of a particular action are likely to outweigh its drawbacks” (Benefit-Cost Analysis, n.d.). The analysis estimates the economic value placed upon a
In the article “Opportunity Cost Consideration”, Stephen Spiller aims at addressing the various issues that are involved in the decision making process of consumers. Spiller argues that buyers need to involve the concept of opportunity cost in their purchasing decisions so that they can manage to meet their unlimited wants using limited resources (Spiller 595). In relation to this, the article focuses on when buyers should embrace opportunity cost, individuals or parties that embrace opportunity cost, opportunity cost that spring into buyers’ minds and consequences involved in the consideration of the opportunity cost. The author accomplishes his goal by conducting several studies. These studies are fall under various categories such as application of multiple mechanisms in assessing opportunity cost consideration, self-reported consideration, thought listings and possibility of purchase. Thus, the author’s findings play a vital role in highlighting consumers’ need to embrace opportunity costs in their purchase decisions.
Sitting close to the edge of being a “developing” and a “developed” country, China is a difficult country to define neatly. It is a country with an ancient and traditional culture trying to position itself higher within the international community. Plus it is also a communist country that has come to embrace its own form of capitalism to fuel its economy. China’s economic boon has been beneficial to many people within the country. But not to all people within China evenly.
...eir welfare as efficiently as they possibly can. According to Harberger (2008), “This process helps them to decide what they will supply and what they will demand,” essentially the ideology that birthed this statement translates into opportunity cost. Forgone opportunity, “or the best alternative sacrificed for a chosen alternative,” Tucker (2013), from the consumer or firms perspective, revolves solely around what they must sacrifice varying from factors of production to the establishment of mutually beneficial alliances with other consumers or firms, etc. Nevertheless, in conjunction with supply and demand, these two primordial concepts form a platonic relationship that generates countless influential possibilities with respect to the decisions made by consumers and or firms in order to truly generate what they perceive as the most efficient use of their resources.
In States vs. Markets, Herman Schwartz presents two economic development strategies that have been employed by late industrial developers in order to either take advantage of existing comparative advantages or facilitate rapid industrial growth through state intervention and provision in order to gain a competitive foothold in world markets. Schwartz demonstrates how China was able to employ elements of these development strategies to generate capital from an abundant rural labour supply in order to pursue industrial development and attract foreign investment through economic reform starting in the late 1970's.
America’s demand for cheap clothes and China’s demand for cheap cotton are a match made in heaven. After China reopened its doors to the world after the transition to Communism, factories were state-owned. The Chinese state exploits the powerless, through the hukou system. Each citizen is registered to specify where they live, and what jobs they have. People with a rural hukou are ‘second-class’, and often migrate to the city to try and work in factories (Rivoli 106-107). Workers in the he yarn and fabric factories work long hours doing dull, repetitive jobs in dangerous conditions. The crushing central planning and human labor left no room for innovation, so the private sector, where innovation is valued, has nearly quadrupled in size (Rivoli 85). Widespread cheating and deception, are becoming common in order to keep costs low, creating a ‘race to the bottom.’ While trying to get on top, factories have destroyed many basic human rights, as well as the environment. It has become commonplace to read news articles about dumping waste into rivers, clear-cutting forests for industrial sites, and heavily polluted air. The humans have hurt the environment, and it may seem as though Mother Nature is trying to bite back. Respiratory diseases from smog and toxic chemicals contaminating drinking water are examples of the environment affecting
Since the start of opening their ports to the outside world, China started to mass produce items fast and cheap. China’s natural resources are diminishing quickly with the demand of their products globally. Most factories that produce goods run on coal or some sort of natural resource. Increasing the demand of goods, means that the demand of coal and other scares minerals increase. In Yeh’s paper she sees that since globalization in China, “[Shanghai] has turned shopping into an entertainment.” Places such as Shanghai had rapidly adapted to globalization by accommodating some western ideas to a sacred city. The rapid growth of globalization in China has caused a massive change throughout the country entirely.
In 1950, only 13% of China’s population lived in cities (Seto, n.d.). Post 30 years, one hundred-million people moved to large cities from rural areas in China. This migration was considered the largest migration in human history. To compare this migration to western cities, the example of Shenzhen is used. For a Western city to have a population of three million to increase to ten million, it takes about a hundred years. 30-year old city, Shenzhen on the other hand made this population increase in just a decade (qtd. Caughey and Dawn). Today, over 53.7% of its population lives in cities; by 2020 it is projected that a whole 60% of the population will live in cities (Xinhuanet, 2014).
Opportunity costs will arise when the company does not choose the best alternative includes interest on capital invested in the stock (Lucey 1988, p.185). The company could have earned interest from the bank if they did not invest the money on these inventories.
Opportunity cost occurs when you are given a choice of two or more things, and by choosing one you lose the potential gain from the other option. In either situation you still benefit, but because
In the case of China, the cause of a robust economy might not match, or even be synonymous with, the causes of political and social change; especially since the effects have not yet reached their full potential. However, there is some contrasts
Well it is hard to justify whether costs and benefits can be quantified. However, they can be measured to a certain degree, but there are multiple factors inculcated into the process that makes it difficult to quantify the factors. There are tangible and intangible costs. One we can easily measure and the ones hidden and unforeseen, such can be explained via involuntary costs, operating expenses and variable costs. Therefore, it becomes difficult to quantify costs. One cannot agree whether costs are most difficult to quantify or benefits. Just because we don’t keep a count of number of benefits we enjoy doesn’t mean it is easy to measure. They both are difficult to measure. However, the measures can vary from case to case.
In the three articles I researched, each author looks at the following use of marginal cost & marginal revenue in decision-making with a strategic point of view. I looked at Covering Entrepreneurship and small business: Basic economic principles: Part II & I the articles written by Karen Hallows. I also looked at What Are the Benefits of Marginal Costs Equal to Marginal Revenue by Thomas Metcalf.
The rise in China from a poor, stagnant country to a major economic power within a time span of twenty-eight years is often described by analysts as one of the greatest success stories in these present times. With China receiving an increase in the amount of trade business from many countries around the world, they may soon be a major competitor to surpass the U.S. China became the second largest economy, last year, overtaking Japan which had held that position since 1968 (Gallup). China could become the world’s largest economy in decades.
For example, the opportunity cost of being an honor student is the choice of being a non-honors student. As a non-honors student you are not required to take any honors courses at all, meaning you have space in your schedule to get started on prerequisites. Honors classes are required for honors students to pick, but are not demanded by all the students as there are some classes that are not suitable to a student’s certain major. This can be seen as a deadweight loss that occurs from an inefficient allocation of classes distributed. While some students are better off as they might find classes that benefit them, other honors students are forced to choose from a list of classes that might not interest them at all. A policy to improve this situation would be to offer more classes that encompass a wider variety of classes for