Ronnie Nurss

Taking Macro and Micro this semester, plus a personal finance class, I have been formally introduced to Opportunity Cost = the highest valued alternative that must be given up to engage or do an activity. For instance, if I decide to buy new shoes ($65) over a nice dress shirt on sale ($25), the opportunity cost of buying the shoes would be a nice dress shirt and $35 in my pocket.

With a focus on economics this semester, I start to recognize the concepts and ideas everywhere in everyday life. Opportunity cost is a big obvious one. We all face scarcity with every decision, besides maybe breathing air, since air is an  unlimited resource, at least for now. So every decision we make, we are giving up or missing out on other opportunities. We all use opportunity cost sub consciously, but if we actually thought about the true opportunity cost of our everyday decisions, I think we would make more efficient decisions.

The main point is this; really try and acknowledge opportunity cost in your everyday real life decisions, and I believe you would all choose the more efficient and beneficial decision relative towards our goals and aspirations. Just don’t use opportunity cost for financial decisions, but for other aspects of life, like relationships and health. Did you ever think of the opportunity cost of hanging out with the same person or crowd, when you could split the time and meet new people or join an organization or club? If you were a business major, would you rather volunteer for an internship or work part time at job that may not cultivate the skills relative to your major or goals? Before choosing to take an unnecessary nap over studying, or choosing a weekend getaway over saving money, analyze the real opportunity cost of each decision.

Applying the concept of opportunity cost to my every day decisions will encourage me to make more efficient and beneficial decisions relative to my goals and aspirations. What do you think? Do you agree?

Thursday, 21. February 2008 at 5:59 pm posted under Lifestyle, Personal Development. You can follow any responses to this entry through the RSS 2.0 feed. You can also Leave A Response or Trackback from your own site. Thanks for reading.