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:
“Liberty requires opportunity to make a living—a living decent according to the standard of the time, a living which gives a man not only enough to live by, but something to live for.”
—Franklin D. Roosevelt (1882–1945)
“To exercise power costs effort and demands courage. That is why so many fail to assert rights to which they are perfectly entitled—because a right is a kind of power but they are too lazy or too cowardly to exercise it. The virtues which cloak these faults are called patience and forbearance.”
—Friedrich Nietzsche (1844–1900)
“The growing of food and the growing of children are both vital to the family’s survival.... Who would dare make the judgment that holding your youngest baby on your lap is less important than weeding a few more yards in the maize field? Yet this is the judgment our society makes constantly. Production of autos, canned soup, advertising copy is important. Housework—cleaning, feeding, and caring—is unimportant.”
—Debbie Taylor (20th century)