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.
Read more about this topic: Opportunity Cost
Famous quotes containing the words opportunity, costs and/or production:
“I only desire sincere relations with the worthiest of my acquaintance, that they may give me an opportunity once in a year to speak the truth.”
—Henry David Thoreau (1817–1862)
“It is commonly said by farmers, that a good pear or apple costs no more time or pains to rear, than a poor one; so I would have no work of art, no speech, or action, or thought, or friend, but the best.”
—Ralph Waldo Emerson (1803–1882)
“The repossession by women of our bodies will bring far more essential change to human society than the seizing of the means of production by workers.”
—Adrienne Rich (b. 1929)