Victoria Segovia, HB
Many are aware of the direct costs of specific items in this world—such as the cost of purchasing a product that is wanted by a consumer. Opportunity costs are also a large factor that come to play in any decision making situation. Rather than the material cost of a good, an opportunity cost is the alternative that is lost when one makes a decision. Opportunity costs play a large role in this world; they affect diverse groups in various ways. They have different outcomes in changing the lives and decisions of many—more specifically, those in poverty versus those dealing with the results in politics.
In the area of politics, there are a number of different effects that the role of opportunity cost has on our country. When focusing on the business world, as those involved in business are particularly involved in politics, opportunity cost is seen as a useful tool.1 It forces those who are making decisions in the business world to look at different perspectives of situations. When focusing on the different aspects of the coming to a conclusion, it helps by creating a more specific focus on the better alternative. The realm of politics alone unambiguously plays a similar role with opportunity costs. It forces a broad group of people to focus on the outcomes of different situations, due to the fact that a seemingly minor change could be detrimental to our country. Focusing on the presidential election—a few votes for a candidate could possibly affect the futures of many, as those votes could determine who will be the next president. Having a complex society with large populations containing different political views makes it harder to please everyone. Guilt is also a large factor in the political or business world—those who make decisions will often regret their choice when reflecting back to the opportunity cost. Therefore, those who are involved in the decision making are forced to conform to society’s standards and to accept the outcome.
When establishing how the world is molded through the detrimental faces of poverty, it is apparent that opportunity costs play a different role in poverty than with those dealing with politics. In some instances, opportunity cost will affect those living poverty because they will not be able to afford as much. For example, “for those financially stressed families, the cost of buying and maintaining a car can create difficult financial tradeoffs. Yet, the opportunity cost of going without one weighs heavily on these poor households.”2 Those living in complete poverty in third world countries however, who are to make decisions, although may not having many, will more commonly be grateful with whatever they have. The theory of opportunity cost therefore does not affect those living in compete poverty as much as it does with those living with the complications in politics. Rather than reflecting back on the opportunity costs of specific instances, those who live in extreme poverty live with such bliss with what they have.
Therefore, those who live in forms of poverty and those who face the problems involving politics contrast in various ways. Each group of people lead different lives with different outcomes—involving different purposes for opportunity costs to enact through. Without opportunity costs, we most definitely would not be where we are today.
- Hofstrand, Don. “Opportunity Cost | Ag Decision Maker.” Opportunity Cost | Ag Decision Maker. May 2008. Accessed June 13, 2016. https://www.extension.iastate.edu/agdm/wholefarm/html/c5-210.html.
- Waller, Margy. “High Cost or High Opportunity Cost? Transportation and Family Economic Success.” The Brookings Institution. December 2005. Accessed June 13, 2016. http://www.brookings.edu/research/papers/2005/12/poverty-waller.
Image: Ehrl, Ronald. Poor, but Happy Kids from Cambodia. February 14, 2014. Cambodia. In Flickr. Accessed June 12, 2016. https://www.flickr.com/photos/117546289@N03/14116129925.