Provide a cost/benefit analysis describing your own decision to pursue higher education. What is the opportunity cost of continuing your education?
The study is focusing on the application of economics theory of comparative advantage and opportunity cost. The cost and the benefit relation are also discussed. Perhaps the most important factors of cost-effective production are the main theory related to comparative advantage and opportunity cost.
The economics is the study of demand and supply. The relative understanding of the opportunity cost and the comparative advantage allows choosing base alternative available. To understand the definition and application of economics in real life scenarios, we need to analyze a certain situation. The question and the answer of it is linked to opportunity cost and cost-benefit analysis.
- What is going to be the life after 2016?
- What will you do after college?
- How much will you earn from the first job after college and the related expenditure of education?
- Where will be your friends (girlfriend/boyfriend)?
- Who will you marry?
- What will be the cost of the house?
Analysis of opportunity cost and cost and benefits analysis:
The understanding of the basic concept of economics and salary of job is needed to be discussed in the opportunity cost. The cost of an opportunity foregone is the answer that will be the answer of opportunity cost. “What will you do after college?” is the idea about state of economy. Whom will you marry has the relation to cost and benefit analysis. Answer to the question about “what will be the cost of the house?” has the clear idea of housing market (Schofield, 2011).
What to produce? Has the relation to the matter of opportunity cost and cost and benefit analysis. The cost and benefit analysis helps to choose among the best possible situation and the business. The increasing educational cost and the availability of income opportunity and job give us the idea of cost benefit analysis. The increasing cost of education and the unavailability of jobs and income opportunities will negatively impact business (Hubbard, Garnett, Lewi, & Anthony, 2014).
Economics and Idea of opportunity cost:
The production cost of the goods does have the relation to opportunity cost. How can two countries benefit from the mutual trade? For an example a worker in USA can produce one car in a month but a worker in UAE can explore 200 gallon of oil in a same month, while a worker in US can produce 150 gallons of oil. The comparative trade in US stands at one car equals to 150 gallons of oil. The UAE worker can produce one car for 40 days time. Therefore, UAE worker to produce oil than concentrating manufacturing cars and US should produce more cars than oil (Chand, 2015).
The era of globalization has underlined the need of development. Each country and each province is creating their own expertise to produce certain goods. This development is significant. The production of the one goods if proves to be cost-effective than producing other good. Then the first goods shall be produced. The opportunity cost of study is related to the job market and earning opportunity. If earning opportunity is there then the students should continue the study despite increasing cost of study. All factors of an economy are relative. This is significant to decide the future course (Hubbard, Garnett, Lewi, & Anthony, 2014).
Chand, S. (2015, 02 22). Effect of Demand Curve on Substitute Goods and Complementary Goods | Micro Economics. Retrieved 02 22, 2015, from
Hubbard, R. G., Garnett, A. M., Lewi, P., & A. P. (2014). Microeconomics;
Aquatic Drive: Pearson Australia.
Schofield, N. C. (2011). Commodity Derivatives: Markets and Applications; https://books.google.co.in/books?id=QFfsjCLD740C&dq=commodity+market&source=gbs_navlinks_s. West Sussex: John Wiley & Sons.