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Opportunity cost at a government level example. Another example of opportunity cost at government level is the effects of the Covid-19 pandemic. Governmental responses to the COVID-19 epidemic have resulted in considerable economic and social consequences, both implicit and apparent.
Production–possibility frontier. In microeconomics, a production–possibility frontier ( PPF ), production possibility curve ( PPC ), or production possibility boundary ( PPB) is a graphical representation showing all the possible options of output for two goods that can be produced using all factors of production, where the given resources ...
Opportunity cost. An opportunity cost example of trade-offs for an individual would be the decision by a full-time worker to take time off work with a salary of $50,000 to attend medical school with an annual tuition of $30,000 and earning $150,000 as a doctor after 7 years of study.
What is opportunity cost and what are some examples? Opportunity cost is the potential benefits or gains an investor, consumer or business misses out on when one alternative is chosen over another.
Opportunity cost is also often defined, more specifically, as the highest-value opportunity forgone. So let's say you could have become a brain surgeon, earning $250,000 per year, instead of a ...
The money spent on the war effort (or peacetime defense spending), for example, is money that cannot be spent on food, clothing, health care, or other sectors of the economy. The stimulus felt in one sector of the economy comes at a direct – but hidden – cost (via foreclosed production possibilities) to other sectors.
In macroeconomics, the guns versus butter model is an example of a simple production–possibility frontier. It demonstrates the relationship between a nation's investment in defense and civilian goods. The "guns or butter" model is used generally as a simplification of national spending as a part of GDP. This may be seen as an analogy for ...
Even if something appears to be free, there is always a cost to the person or to society as a whole, although that may be a hidden cost or an externality. For example, as Heinlein has one of his characters point out, a bar offering a free lunch will likely charge more for its drinks. Early uses TANSTAAFL: a plan for a new economic world order.