Analyse The Concept Of Opportunity Cost Economics Essay

Analyse The Concept Of Opportunity Cost Economics Essay Introduction The answers start with the basic theories of microeconomics and contact with an analysis of actual cases to solve the following four problems. It refers from the opportunity cost, scarcity of resources, cross-price elasticity, income effect, substitution effect, the producer surplus to long-run equilibrium for a perfectly competitive industry. 1. (a) The concept of opportunity cost is due to the scarcity of resource, the scarcity of resource determines that the resource can not be used for purpose B any longer if the resource has been used for purpose A. Therefore, opportunity cost means that if a resource can be not only used for one purpose but also used for another purpose (if it used for one purpose, it must give up other uses due to the scarcity of resources), then the opportunity cost indicates that the resource used for purpose A refers to the net incomes it should have got if it was used for a better purpose B. That is, if the resource has been used for a purpos e A, you will lose the possible incomes, so it is a loss of opportunity. This loss must be taken into account when the company choose the use of corporate resources in the selection, only the opportunity cost is the real cost to the economists. Opportunity cost is characterized by selective and hidden. The friend above says he has a free pass to go to the game of cricket between Australia and South Africa and it won’t cost me anything, according to the concept of opportunity cost above, he is wrong about the cost of going to watch the cricket match .The reasons are as follows. On the one hand, I will lose my time on watching the match; on the other hand, if I do not go with him, I can do my own business, such as study or something meaningful, so I would have lost the incomes I should have got. (b) Resources are scarce. Scarcity of resources has two meanings: One meaning is that we have to cost if we want to obtain any resources . The other one is that any resources are limite d relative to people’s needs and desires. Nowadays, universities are confronted with the problem of scarcity of resources with respect to the degree courses it provides. It is the higher quality teaching resources and the scarcity of supply of higher education demand for high quality teaching resources that restrict the improvement of the quality of higher education. There are both structural imbalances and the total lack of teaching resources problems. The main factors that affect our level of sharing of teaching resources and efficiency are resource development, resource sharing mechanism design and resource sharing of technical support. For example, Ideological and Political Theory Course teaching resource are scarcity, which can not meet the normal practice of teaching needs; the scattered, idle and waste related issues in the use of the Ideological and Political Theory Course teaching resource are also important factors that affect the supply and demand balance in additi on to its own supply shortage. In specifically speaking, there are two aspects. On the one hand is the disperse regions, which refers to the non-uniformity of time and space in the rule of teaching resources in the Ideological and political theory; on the other hand is the non-uniformity on time, which refers to the differences between the history resources and reality performance.