Glamor Economics

Chapter 31

Chapter 5 Section 3 The cost behind the choice - opportunity cost

Opportunity cost in economics refers to another thing that is given up in order to get something, that is, the benefits that can be obtained in other uses after a certain resource is put into a certain use.We weigh the pros and cons of doing one thing, and then make the best choice. The choice that is abandoned is the opportunity cost.The following joke helps us understand the concept of opportunity cost.

There was an elderly bachelor on a plane, and sitting on the inside, to his right, was a handsome young man.Due to a temporary glitch, the plane was delayed from taking off.After takeoff, the captain apologized to the passengers and announced that there will be free drinks for everyone immediately.

When the glamorous stewardess arrives with a trolley, the Bachelor asks her for a glass of juice.The stewardess then asked the young man if he wanted a glass of juice too.The young man deliberately teased and said: "No, thank you! I would rather have a relationship with you than drink juice!" Upon hearing this, the bachelor immediately returned his juice to the stewardess and said, "Miss, I didn't know there was another A choice!"

If there is a gain, there must be a loss. The so-called shark's fin and bear's paw cannot have both.If the airline really provides the opportunity to fall in love with a stewardess, the moment the bachelor decides to pick up the juice, his opportunity cost has already appeared-he has lost the chance to fall in love with the stewardess, and the stewardess may become his wife.

Many people have had this kind of confusion: two boxes of apples, one box is big and fresh, and the other box has been spoiled due to long storage, which box to eat first, the good ones or the bad ones?

There are two most typical eating methods: the first one is to eat the rotten ones first and cut off the rotten parts.The result of this way of eating is often to eat rotten apples for a long time, because when you finish eating the rotten apples in front of you, the original good apples will rot again.The second is to start with the best, and then eat the next best.This way of eating is often impossible to eat all the apples, because in the end, the rotten apples are too rotten to eat, so they are all thrown away, which forms a certain waste.But the advantage is that after all, you have eaten a good apple and enjoyed the good taste of a good apple.This question was to test whether the respondent was optimistic or pessimistic.According to the test points at that time: people who eat in the former way are pessimistic people, and those who eat in the latter way are optimistic people.

People who usually like the first way of eating think that the second way of eating is easy to cause waste.People who prefer the second way of eating feel that enjoying the taste of good apples is more important than throwing away a few rotten apples.

Both ways of eating have their own reasons.In real life, which apple to eat first does not actually have much impact on the individual.But the choice of which apple to eat first has a different meaning behind his behavior.And rational people in real life are more willing to adopt the second way of eating.Eating apples is different from eating, not to satisfy your hunger, but to taste its taste and absorb its nutrition.In this sense, it is more rational to eat well first.In the language of economics, the opportunity cost of this way of eating is relatively small.

When we make choices, we should always keep in mind the concept of opportunity cost.Generally speaking, the higher the opportunity cost, the more difficult the choice is, because in our hearts we are never willing to give up what we might get easily.

[links to related words]

Opportunity cost refers to the maximum value of giving up something in order to get something.

(End of this chapter)