Talk:Opportunity cost

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Wiki Education Foundation-supported course assignment

This article was the subject of a Wiki Education Foundation-supported course assignment, between 14 January 2019 and 2 April 2019. Further details are available on the course page. Student editor(s): Toubizac. Peer reviewers: Toubizac.

Above undated message substituted from Template:Dashboard.wikiedu.org assignment by PrimeBOT (talk) 05:46, 17 January 2022 (UTC)

Can we clarify the first paragraph definition to make clear how 'best choice' is typically defined?

Without this important information, non-experts are unlikely to be able to make sense of the general definition. For example, does 'best choice' refer to short-term or long-term planning? Does it already take costs and benefits into account, including 'opportunity costs' of different alternatives? Is opportunity cost dependent on what criteria are used to arrive at 'best choice'?

It seems to me that opportunity cost as economists use it refers not simply to a cost of not taking the benefit of the 'second best alternative', but rather the cost involved in choosing any alternative over another. The whole notion of 'first best' and 'second best' alternatives rests upon criteria that are themselves important to the discussion of opportunity cost.

As an example, if both electricity and water utilities are damaged after a storm, one could ask what is the opportunity cost of focusing resources on prioritizing the repair of one utility over the other. It might be argued that water utilities are more expensive to repair because pipes are underground while electricity utilities are more accessible by being above ground. But repairing electricity utilities first based on the idea that they are the cheaper option doesn't mean that it is the best option, if ongoing drinking water pollution or shortages lead to more illnesses and death than would happen if one were without an electric light bulb or cooker. Of course, water supplies may also rely on electricity supply for pumping stations, but this is meant to be a simplified example.

In other words, if 'best choice' is defined in monetary terms alone, it creates a different set of opportunity costs than if it is defined in terms of 'lives saved' or 'risks minimized' or any other host of criteria. If 'risks minimized' were to be the criterion, then the opportunity cost will be different, for example, accidents that happen as people move around in the dark, as opposed to an opportunity cost of people drinking unclean water in the alternative scenario.

Any thoughts on how to clarify this? I speak as a student of the topic wanting to understand, not an expertMark.helsinki (talk) 23:26, 2 January 2018 (UTC)

Caseyarandela (talk) 15:02, 1 November 2020 (UTC) I did a complete redo of this article, keeping in line with the plagiarism guidelines. This will start off the process of making this article have a higher article rating.

I have adjusted the intro section for greater clarity. 76.65.24.235 (talk) 04:35, 22 August 2022 (UTC)

Economics

Opportunity cost 27.56.234.36 (talk) 05:23, 2 December 2021 (UTC)

Opportunity costs are microeconomic . ShuFanLi (talk) 12:53, 2 May 2022 (UTC)

Text in images

In this article there are images containing text which would be better formatted as tables or quoted text. Crookesmoor (talk) 15:31, 5 July 2022 (UTC)

economic

1. विभिन्न सरकारी नीतियों के कारण पीपीसी पर प्रभाव अदृश्य हाथ (एडम — Preceding unsigned comment added by 2409:4050:E03:480:40A4:9BB5:76FC:3DCE (talk) 10:15, 21 October 2022 (UTC)

Definition unclear

I must admit I cannot understand the concept of opportunity cost from the definitions given in this article.

Let's take a simple scenario: I have to choose between two options, A and B. With option A I must pay $100 now but will receive $130 a year from now. With option B I must pay $100 now and will receive $110 a year from now. What would be the opportunity cost of choosing option A? Would it be $110 (the value of benefit given up) or $10 (the value of benefit given up, understood differently) or -$20 ((returns on best Forgone Option) - (returns on Chosen Option))?

Here's another scenario: I can make $100 per hour working as a lawyer. I have to choose between option A, mowing my own lawn, which takes 2 hours, or option B, hiring someone to mow my lawn, which costs $50, while lawyering for 2 hours and making $200. What is the opportunity cost of option A? I could argue for $150, or $200. AxelBoldt (talk) 00:27, 15 November 2022 (UTC)

Natural resource depletion

Depletion of resources means lost opportunities to use them in the future.

A policy of charging (higher) fees to extract resources could motivate reduced consumption of limited resources in the present, in favor of more availability in the future. Sharing proceeds from extraction fees to all people can ensure that the policy is fair, and that people will not be compelled to reduce use of resources in service of essential needs in the present. John Champagne (talk) 18:35, 5 January 2024 (UTC)

Explicit Costs

The definition as described includes "wages" then the explained scenarios leave out the cost of the wage in the scenario given. This should be edited to reflect the proper cost on the business in the scenario. Otherwise it is not 100% accurate. The wage has to be taken into account for accurate cost scenarios. Jmurphy042000 (talk) 04:12, 2 May 2024 (UTC)