In economics, opportunity cost is defined as the cost of not choosing the next, best alternative for your money or time.
Everything in life has an opportunity cost. If you want to go to the movies with friends it means you can’t stay home and read a good book. If you want to spend cash on new furniture, it means you can’t buy more shares of a blue chip stock for your portfolio. If you want to donate time to a charity that helps clothe poor children, it means you can’t be down at the local soup kitchen feeding the hungry.
[mainbodyad]Each of us has vastly different opportunity costs for the same actions. If your parents can pay for college, you might be able to get a low-return degree that doesn’t pay well without destroying any hope of future economic security. If you are naturally gifted at sports, you might be able to invest time in earning a golf scholarship to cut the total expenses you have to pay to get a degree in finance. We cannot control the opportunity costs that are presented to us at birth, only work with the cards we are dealt and attempt to structure the best possible hand. In a free and just society, everyone has the opportunity to move up the socioeconomic hierarchy by providing value to society.
We live in a finite world. As the CEO of your life, your job is to invest the 525,600 minutes per year and the money that is under your control in a way that results in the greatest happiness for you and your family, while simultaneously paying it forward to improve society for the next generation.
Instead of being upset about the presence of opportunity cost, or ignoring it through omission bias, embrace it. Arrange your life. Make choices. Live with the consequences of those choices. If they turn out to be wrong, as long as you can handle the downside, remember the lessons for the next go-around.
Category: EconomicsBy Joshua KennonLeave a comment
Opportunity Cost Essay
623 WordsAug 24th, 20103 Pages
Discuss the opportunity cost of getting your MBA. What steps and economic factors must a student make when choosing between getting a degree and taking another route in life? Feel free to include aspects from your own decision to pursue your MBA.
When considering to starting an MBA program, there are many questions that you have to ask yourself. Can I afford the program? Will it help me to become more marketable in the job industry? Will I have time to dedicate into completing coursework? Should I obtain it online or in the classroom? Hopefully after you have answered all of the questions and weighed the pros and cons, you will be able to come to the conclusion of whether getting your MBA is worth it.
The opportunity cost of…show more content…
The money that is paid to obtain your degree would be considered your explicit cost. Explicit costs can include but not limited to, tuition, fees, student loans, and books to name a few. If you decide to take classes online you also have to invest money in to a computer or laptop and internet services. The good news to some students is that some employers will offset explicit costs by offering tuition assistance. (Thomas-Maurice, 2008)
One of the most important step that I took in the decision-making process, I did my research on universities that had a good MBA program. But before that, I researched the benefits of obtaining an MBA. According to Kelly Wingard, in the process of obtaining your MBA, you will develop skills such as communication, strategic planning abilities, leadership qualities, and analytical thought processes. I felt that in the pursuit of a new career in corporate America, these skills will build my confidence, open doors to new opportunities and hopefully provide some job security. (Wingard, 2008)
From the economic standpoint, yes I can say that obtaining a MBA is very expensive, but I know in the long run it is a minor investment compared to the amount of opportunities that will be available to me in the future.
Thomas-Maurice. (2008). Managerial Economics. McGraw Hill Companies.
Wingard, K. (2008). MBA - The Wonder Degree: Boost Your Income and Improve Your Outlook without Breaking Your Budget. Retrieved