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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Famous quotes containing the words opportunity, costs and/or production:
“If, at any time, it comes into my head, that a present is due from me to somebody, I am puzzled what to give, until the opportunity is gone.”
—Ralph Waldo Emerson (1803–1882)
“Like cellulite creams or hair-loss tonics, capital punishment is one of those panaceas that isn’t. Only it costs a whole lot more.”
—Anna Quindlen (b. 1952)
“... if the production of any commodity necessitates the sacrifice of human life, society should do without that commodity, but it can not do without that life.”
—Emma Goldman (1869–1940)