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.
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—Ralph Waldo Emerson (1803–1882)
“The real price of everything, what everything really costs to the man who wants to acquire it, is the toil and trouble of acquiring it.”
—Adam Smith (1723–1790)
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—Philip Dormer Stanhope, 4th Earl Chesterfield (1694–1773)