Why must the opportunity cost of a decision always be something desirable?
?
Answer:
Because it represents your 2nd best option. For instance, taking the train is 2nd to having a private car & driver...hitchhiking is a distant 3rd...or 30th...right below riding a unicycle or pogo stick.
That is not a true statement but only your assumption that opportunity means positive or good. In the context of the phrase opportunity cost, it really only means a forgone choice and the resulting impact compared to the other option.
It's not an easy answer. The opportunity cost always is something desirable. The explanation: To keep it simple, assume there is only one good in the economy, the is only one consumer and the consumer has a budget set.
The argument is contrapositive. Suppose there is indeed a opportunity cost in terms of something that is strictly not desirable, then as the opportunity cost is the second best option and there is only one good, the good is not desirable. There is no economy! The only way opportunity cost does not exist is that there is not a decision.
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Answer:
Because it represents your 2nd best option. For instance, taking the train is 2nd to having a private car & driver...hitchhiking is a distant 3rd...or 30th...right below riding a unicycle or pogo stick.
That is not a true statement but only your assumption that opportunity means positive or good. In the context of the phrase opportunity cost, it really only means a forgone choice and the resulting impact compared to the other option.
It's not an easy answer. The opportunity cost always is something desirable. The explanation: To keep it simple, assume there is only one good in the economy, the is only one consumer and the consumer has a budget set.
The argument is contrapositive. Suppose there is indeed a opportunity cost in terms of something that is strictly not desirable, then as the opportunity cost is the second best option and there is only one good, the good is not desirable. There is no economy! The only way opportunity cost does not exist is that there is not a decision.
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