Question

What is your opportunity cost of taking this economics course at Berkeley College? How does the role of scarcity influence decisions that you have to make?

Answer 1

When a student decides to enrol in a degree program at college, he needs to sacrifice all the other opportunities that he could have without it. The expenditure on tuition is the opportunity cost of joining college. This is because the student pays tuition when he is studying in college. Opportunity cost also includes the explicit payment made in selecting arn alternative. Therefore, expenditure on tuition is a part of opportunity cost of going to college. The income earned after graduating from high school is also an opportunity cost because the student will not be earning anything during college Hence, expenditure on tuition and the income lost while studying in college constitute the opportunity cost of being a full-time college student. Resources are scarce and each of them can be put to numerous uses or alternatives. When one alternative is selected, others have to be rejected. The next best alternative that is rejected over the selected one entails a cost which is considered the opportunity cost of the selected alternative. In this manner, when a decision is made, it has a definite opportunity cost due to resources being scarce. This is also the reason why scarcity affects decision making