Opportunity Cost - Opportunity Costs in Production

Opportunity Costs in Production

Opportunity costs may be assessed in the decision-making process of production. If the workers on a farm can produce either one million pounds of wheat or two million pounds of barley, then the opportunity cost of producing one pound of wheat is the two pounds of barley forgone (assuming the production possibilities frontier is linear). Firms would make rational decisions by weighing the sacrifices involved.

Read more about this topic:  Opportunity Cost

Famous quotes containing the words opportunity, costs and/or production:

    In the genuine hope that this peace will be permanent, we take the opportunity to pay homage to all our fighters, commandos and volunteers who have paid the supreme sacrifice. They did not die in vain. The union is safe.
    —Combined Loyalist Military Command. New York Times, p. A12 (October 14, 1994)

    It costs you something to do good!
    Zora Neale Hurston (1891–1960)

    It is part of the educator’s responsibility to see equally to two things: First, that the problem grows out of the conditions of the experience being had in the present, and that it is within the range of the capacity of students; and, secondly, that it is such that it arouses in the learner an active quest for information and for production of new ideas. The new facts and new ideas thus obtained become the ground for further experiences in which new problems are presented.
    John Dewey (1859–1952)