The Cost of Something

(First 01 October The Cost of Something is What You Give Up to Get It The opportunitycost of going to Good Times’ concert is the Hot Stuff’s show because the former is the first best alternative for me after looking both costs of my actions. If I value the concerts $225 and $150 respectively, I would lose $75 for choosing Good Times Band. However, I would gain more than the difference for thinking rationally. Consumer must be indeed rational in any way. Driving a long way to Hot Stuff will cost me fuel and energy, and how if I would just save that time and prepare for my exam after enjoying the Good Times’ performance? I guess there’s more to gain. According to swlearning.com, decision-makers have to consider both the obvious and implicit costs of their actions. Based on Merriam-webster.com, obvious means seen, on the other hand, the word implicit signifies unexpressed idea but has the capability of being understood.
Firstly, to have a better picture of it, $75 economic profit that I supposed to receive from watching the Hot Stuff’s concert is the obvious cost of my decision. On the contrary, the fuel and energy that I will save, plus the extra time I can go back to my lessons for the exam the following day are the implicit costs of a wrong decision. So, watching the Good Times Band give me a sigh of relief, there’s no more thinking of driving a long way home and I won’t cram anymore for a last-minute scanning of notes. Anyway, decisions like this are not an easy task as always. Without examining the cost, or without understanding the concept of economics by Gregory Mankiw, I might have chosen the Hut Stuff band because I value it higher than the other one. Simply analyzed, Hut Stuff is my favorite, but they are rather both the best bands. Consumers and decision-makers must be aware of the seen and unexpressed costs of their actions economically. What would be more than $75 gain? Or is it a gain or loss? Well, one can only tell if the unexpressed cost is disclosed. The latter has been defined as capable of being understood, although it’s hidden but it can be recognized in the point of making decisions. One must not be a genius of arithmetic, solving the costs entails the basic math equation which are addition and subtraction, together with the right estimates of value of the implied benefits. How can I value the fuel or the fare? Well, it’s getting obvious by now. How much is the gasoline right now? Or how much is the bus fare? How about the energy I can save for not spending much of it for a long drive or trip? What is the value of getting a good examination grades? Would it exceed $75.00? Yes, it can definitely exceed that value. Even if I would just think about my examination, getting a passing score, or better, an excellent grade for studying it over again for my remaining time would compensate me higher in the long run. What is the real value of $75? Would it benefit me like what I supposed to have when I received some good grades? Hence, it is clear that watching the Good Times’ concert is a better choice for its implicit value exceeds the economic profit of $75 if I choose to watch the Hot Stuff’s show.
Secondly, let’s put the idea above to concrete examples, if supposed I have chosen the Hut Stuff band, to be my favorite, yes, I have enjoyed the breath-taking live performance. however, I encountered problem on my way home because there’s a car accident that cause a heavy traffic on the road. Is the satisfaction of watching the concert that I have shown as economic profit of $75 can buy a grade that would satisfy the requisite for the program am taking? It cannot, the exhaustion brought by it would just weaken my memory, and can result to worse scenario – failing grade! On the other hand, if I chose to see the Good Times’ performance, since most people say they have performed the same on the past concerts, and share the same level of popularity in country, I have gained more! The concert last for few hours, I am really satisfied with the live show as if I have watched my favorite band, plus I get several hours to review my notes, read some theories, and solve some problems related to our lessons. Would I exhaust myself then? Would I cram? I am sure I can rest early, wake up early, and get the right amount of energy that I need for the examination! I am all set! Fortunately, making up my mind for the Good Time’s band will give me more benefits – enjoyment, relaxation and more preparation for my approaching examination!
To sum up, the opportunity cost of something is the value of the next best alternative in a decision. Not looking at it carefully would confuse someone who is trying to comprehend economics. The italic word next simply means the second best alternative. Every wise decision-maker chose the first best alternative! As what I have explained above, the benefit is higher upon considering both obvious or seen, and implicit or unexpressed costs of actions, well, with the help of rational thinking and simple arithmetic application. Therefore, the opportunity cost of watching the Good Times’ concert is the Hot Stuff band because after a careful and rational examination of the obvious and implicit costs of my decisions or actions, the former is unquestionably the first best alternative to choose from!
Works Cited
Mankiw, Gregory. Principles of Economics, 2e. swlearning.com. South-Western, n.d. Web. 01
Oct. 2012
Merriam-Webster.com. Merriam-Webster, Incorporated, 2012. Web. 01 Oct.