Opportunity cost is defined as representing the potential benefits an individual PDF

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Opportunity cost is defined as representing the potential benefits an individual, investor, or business misses out on when choosing one alternative over another. The idea of opportunity costs is a major concept in economics”. The formula for calculating an opportunity cost is simply the difference between the expected returns of each option (Palmer & Raftery, 1999). I have experienced many opportunity costs in my life but the main one I would discuss here which is a personal life experience is having to go the opportunity to own a house in Ghana but forgo it to rather do business with the capital I got from my late father inheritance. I was very young when my dad passed away so my guardian waited for me to turn eighteen before he broke the news to me saying my late father left me a house. I wanted to have a company of my own that will yield profit while I still learn from the job I decided to sell the house use the capital to open a block factory. I made this decision because comparing the two properties is owning a house or a company. Owning a company I stood a higher chance of progressing quickly in life in the sense that I will be working and will be able to purchase a house shortly rather than keep and staying in the house. in my country work is in higher demand so having your own company or business will not only help me as an individual but also help the community the company is situated in and beyond. For instance, it may take a graduate in Ghana about 5 years to gain an entry-level job and over 7 or 8 years to be gainfully employed. I had a better opportunity to set my own business than rely on the government to be employed. The only available alternative was to forgo the building and open a business with my business I can acquire anything I want. It was practically impossible to even sell my father's house this is a property my late father left for me. Scarcity, also known as paucity, is an economics term used to refer to a gap between the availability of limited resources and the theoretical needs of people for such resources. As a result, entities are forced to decide how best to allocate a scarce resource efficiently so that most of the needs and wants can be met. Therefore, all resources with a non-zero cost in the process of consumption can be considered scarce to a given extent. However, in practice, what matters is what we call relative scarcity. The availability of scarce resources can force one to make a choice and a trade-off. The availability of scarcity limits the finite capacity of decision-making. For instance, the scarcity of money can affect one's decision to spend on urgent needs while ignoring the other important things which come with a burden of future cost. In my case, selling my father's property necessitated my decision to set up my own business. After all, what is the essence of having a house but no money to take care of yourself and roaming for several years without a job? If opportunities abound and the likelihood to be gainfully employed then I could have easily forgone the opportunity to sell the house. Finally, there wasn’t much time for me to explore the various options that may be available to me. Time is one factor that can influence one to make a decision, hence it becomes necessary to make the rationale decision with the limited time available Reference

Investopedia (n.d). Opportunity Cost. https://www.investopedia.com/terms/o/opportunitycost.asp Palmer, S., & Raftery, J. (1999). Economic Notes: opportunity cost. BMJ (Clinical researched.), 318(7197), 1551-1552. HTTP HTTP...