Oppertunity Costs
In today's society, economic decisions made involve the concept of scarcity.
There are "opportunity costs" associated with any choice that you make. In order for an
economy to produce more of one type of product, it will be forced to sacrifice units of
production of another product. The shifting of resources from the production of one good
to another involves increasing sacrifices of the first good in order to generate an equal
increase of the second good. This is known as the "law of increasing opportunity costs."
The economic rational for the law of increasing opportunity costs is that economic
resources are not completely adaptable to alternative uses. The opportunity cost of
producing a product tends to increase as more of it is produced because resources less
suitable to its production must be employed. Prices are a measure of opportunity cost
because they provide information about the value of one product in relation to another.......
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Oppertunity Costs
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