Registered: Aug 2011
04-22-12 01:39 PM
Quote from cinhet:
Question: Explain the importance of the concept of opportunity cost in Economics. How does it relate to monetary cost?
I plan to define opportunity cost. Define other costs (Fixed Cost...).
Write about the importance of opportunity cost. (Investment, Profit, Individual Choice, International Trade)
However, i don't know what to write about the difference between monetary cost and opportunity cost.
Hope you can help. Thank You.
Whenever you undertake one action/opportunity that means that you forgo another one, you have to consider what you are missing. The other action/opportunity is your opportunity cost. Often economists examplify opportunity cost by quantifying it (assigning number values). Monetary cost is just the monetary value (assigned) of the other project.
I'm not sure that there is much to uncover in the definitions to do a whole essay.