Economics
Every decision has an Opportunity Cost due to the nature of scarcity, there is always a better alternative not chosen, therefore, there is always an opportunity cost. “The opportunity cost of an alternative is what you give up to pursue it” (Froeb, McCann,Shor & Ward, 2016). When you go to a Maroon 5 concert, you give up $100 of benefits you would have received if you had gone to a Beyoncé concert. Also, you would also avoid $80 of cost for the Beyoncé concert. According to the definition below, the opportunity cost of seeing Maroon 5 concert is $100 - $80 = $20. Please delve into the statement there are always opportunity costs. How can an individual make the best decision? Is there a best decision? Would one miss an opportunity not attending one of the concerts? Include a minimum of one reference.
Sample Solution
The idea that there are always opportunity costs to decisions is an accurate statement. In order to make the best decision and maximize utility, individuals must weigh all of the potential options and understand the trade-offs associated with each. Every option has its own benefit and cost, so in making a decision,
one should consider what is most important for them in terms of benefits received minus the costs incurred. This can help individuals identify which choice is likely to give them the most satisfaction or value for money spent.
When it comes to deciding between attending a Maroon 5 or Beyoncé concert, for example, a variety of factors will come into play: budget constraints, personal preferences (genre of music), location/venue preference etc. It would be impossible to determine which concert would be best without first considering these variables; however once these have been taken into account it becomes easier to assess which would give more ‘bang for buck’ - i.e., provide greater return on investment if tickets were purchased at face value prices (taking into consideration travel expenses). As such yes, there could be said to be a “best” decision in this scenario; although this may vary depending on individual circumstances as outlined above.
In not attending one of these concerts an individual does risk missing out on certain opportunities – e.g., enjoyment from watching band performances live – but by weighing up various aspects such as those mentioned previously they can still strive towards making an informed decision that weighs all possible outcomes against their values & preferences before committing resources (time & money) to any given activity or purchase item(s).
In conclusion, while there are always opportunity costs when it comes to making decisions due to scarcity and competing alternatives available within society today; through careful research & analysis individuals can assess different options objectively and make decisions based on what is seen as providing greatest return on their investments both financially & emotionally - thereby maximizing utility overall..
Reference: Froeb LM et al (2016) "Managerial Economics", 11th edition Cengage Learning