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8 votes

Piracy/File sharing - Why aren't songs, movies or ebooks given for free (+ads) like TV?

What I don't see here is an economic model, however rudimentary, that will allow us not to definitely answer the question but to clarify what are the critical issues. So here's one (totally ...
Alecos Papadopoulos's user avatar
6 votes

What is the opportunity cost of doing something in your spare time?

There is a crucial detail missing in the scenario you describe. Is the worker working a five day week (and no more) because that is what their terms of employment require? Or do they have the option ...
Adam Bailey's user avatar
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4 votes

Opportunity profits vs. opportunity costs

Opportunity cost is simply the value not obtained of the highest value alternative. It can be positive or negative; meaning it doesn't really make sense to define the opposite as opportunity profit. ...
Clinical_Coder's user avatar
3 votes

Opportunity profits vs. opportunity costs

First off some terminology: opportunity cost are not necessarily avoided profit. Profit is a term that is used for firms, but opportunity cost does not just apply to firms. Moreover as @clinical coder ...
Maarten Punt's user avatar
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3 votes

Piracy/File sharing - Why aren't songs, movies or ebooks given for free (+ads) like TV?

Isn't this mostly an issue of pricing at a level where most people feel it's worth paying to avoid the hassle (and potential legal issues) of piracy? Take music singles for example: when I was a ...
Will Appleby's user avatar
3 votes

What is Opportunity Cost?

As other answers clarified, the Opportunity Cost has been defined as the value of the best alternative foregone. Assume that the gain in activity B will be positive, say USD 20. This too does not ...
Alecos Papadopoulos's user avatar
3 votes
Accepted

Does Game theory consider opportunity cost?

Recall that Oppurtunity Cost is referred to the benefit forgone by choosing the other option. In your example of a single player game, opportunity cost exists since the architect is completely in ...
EconJohn's user avatar
  • 8,407
3 votes

How to analyze small human activities from the economical standpoint?

A useful framework for analysing personal activities involving both monetary and time costs is a household production model. A simple example of such a model (adapted from Chiappori & Lewbel (2015)...
Adam Bailey's user avatar
  • 8,529
3 votes
Accepted

Trying to understand: "If the relative price is less than the opportunity cost, then the individual is better-off not producing the product."

Could you please provide me with a simple model that could help me visualize what is happening? A example is as follows suppose that the relative price of cloth is 4 units of wine. Hence by selling ...
1muflon1's user avatar
  • 56.9k
3 votes

Opportunity cost argument for setting up manufacturing sweatshops in poor asian countries

First of all, an opportunity cost is defined as the potential benefits that someone misses out on when choosing one alternative over another Would you mind sharing what book that was and on what ...
AKdemy's user avatar
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3 votes
Accepted

Time value of money: impatience, risk, inflation... and opportunity cost?

What you describe would be called an opportunity cost (or in this specific example opportunity cost of holding cash) in economics (see Mishkin & Eakins Financial Markets and Institutions pp 295). ...
1muflon1's user avatar
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2 votes
Accepted

Is opportunity cost market prices of input goods or income from alternative investments?

The market value of the inputs are determined by the most lucrative possible investment opportunity. Yes, the concept of market value is a simplification. If your firm alone can make the investment ...
Giskard's user avatar
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2 votes

What is Opportunity Cost?

Opportunity cost is what you forgo for choosing something else. Commonly thought of in economic terms as follows: Opportunity cost refers to a benefit that a person could have received, but gave up,...
jphillips's user avatar
2 votes
Accepted

In the long run, would a production-possibility curve expand outward if the country preferred more consumer goods than capital goods?

To keep things simple, let's assume that inputs to production other than capital goods are constant over time, and that production technology is regarded as one of those inputs (ie there is no ...
Adam Bailey's user avatar
  • 8,529
2 votes
Accepted

Is the opportunity cost under the supply curve?

Opportunity costs occur for all suppliers. The lowest price at which supply occurs (agents willing to sell) is just above the lowest opportunity cost of the suppliers. I would not describe it as a ...
William Cerkvenik's user avatar
2 votes

What is the opportunity cost of doing something in your spare time?

Since you are presumably not working 24 hours a day, your free time clearly has an economic value > 0 to you (otherwise driving an Uber or solving tasks on Amazon's MTurk would be preferable to having ...
xLeitix's user avatar
  • 121
2 votes

Is there a formal definition of opportunity costs, economic costs, and/or economic profits?

Economic profit I think there are some problems with the formulation in your question, first you heavily focus on opportunity cost but note accounting profit does not even properly capture all revenue ...
1muflon1's user avatar
  • 56.9k
2 votes

What is the problem with this opportunity cost example?

First of all its all just joke so you should not read too much into it. Most jokes are based on some false/overly simplified premise. You are right: There are two problematic claims here: Being ...
1muflon1's user avatar
  • 56.9k
2 votes
Accepted

What is the problem with this opportunity cost example?

The joke is conflating the value of the item you get and the value of the option to determine which item you get. Suppose I value the Snickers at $\\\$.4$ and the M&Ms at $\\\$.75$. If I am ...
Giskard's user avatar
  • 29.3k
2 votes

Opportunity cost for a real estate company

What an interesting exercise. First, it depends on what your other opportunities are - as you say here selling for cash on the next day. Let's assume that's the only other thing happening, and you ...
RegressForward's user avatar
1 vote
Accepted

opportunity cost when inside production possibility frontier

This would only work if the resources have literally no alternative uses (e.g. think of mana that according to the Judeo-Christian mythology could be only just used for immediate nourishment or it ...
1muflon1's user avatar
  • 56.9k
1 vote

What is the opportunity cost of going to a football match?

Considering opportunity costs as the potential benefits an individual misses out on when choosing one alternative over another. So if you choose going to the concert your benefit (utility) is 10 (50 ...
Robert's user avatar
  • 176
1 vote

What is the opportunity cost of going to a football match?

Note that the opportunity cost is what you gave up to get it, not necessarily the price of what you gave up to get it. Your opportunity cost is not what you perceive as the value of the rock concert ...
Cotton Headed Ninnymuggins's user avatar
1 vote

Why is the opportunity cost 0 in this case?

I think the point that the author was trying to make was that opportunity cost refers to the "best alternative use" of something. The measure is used to understand marginal decision making. Suppose ...
Poorvi's user avatar
  • 146
1 vote

Are opportunity costs synonymous with economic costs?

You have it dead on! There opportunity cost is the next best alternatives that you forgo when you decide (in this example) to go to college. Because there is always some opportunity cost to every ...
bdempe's user avatar
  • 308
1 vote

How is "opportunity cost" an useful concept? Even when it does exist?

As Ben has correctly specified, the opportunity cost is defined in terms of "what am I giving up? ". In a microeconomic sense, If as a household I decide to save for my kid's college then my ...
Poorvi's user avatar
  • 146
1 vote

How is "opportunity cost" an useful concept? Even when it does exist?

Probably the most useful aspect of the concept of "opportunity cost" is to distinguish between choice problems where a particular choice is available, but the alternatives differ. The concept of ...
Ben's user avatar
  • 275

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