Economics Dictionary of ArgumentsHome
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| Opportunity cost: Opportunity cost in economics refers to the value of the next best alternative that is forgone when a decision is made. It represents the trade-off between different choices, highlighting what is sacrificed in order to pursue a particular option. Opportunity cost helps individuals and businesses make more informed decisions by considering the benefits of all alternatives. See also Costs._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Murray N. Rothbard on Opportunity Cost - Dictionary of Arguments
Rothbard III 265 Opportunity Cost/Rothbard: What (…) is the “opportunity cost” or, simply, the “cost,” of the exchange, i.e., the next best alternative forgone? This is the most valuable use that [someone] could have made with (…) five grains of gold. This could be any one of the following alternatives, whichever is the highest on his value scale: (a) expenditure on some other consumers’ good; (b) use of the money commodity for purposes of direct consumption; (c) expenditure on some line of investment in factors of production to increase future monetary income and consumption; (d) addition to his cash balance. It should be noted that since this cost refers to a decision on a marginal unit, of whatever size, this is also the “marginal cost” of the decision. This cost is subjective and is ranked on the individual’s value scale. Rothbard III 360 Production: (…) the disutilities of labor and of waiting - as expressed in the time-preference ratios - determine how much of people’s energies and how much of their savings will go into the production process. This, in the broadest sense, will determine or help to determine the total supply of all goods that will be produced. But these costs are themselves subjective utilities, so that both “blades of the scissors” are governed by the subjective utility of individuals. This is a monistic and not a dualistic causal explanation. The costs, furthermore, have no direct influence on the relative amount of the stock of each good to be produced._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Rothbard II Murray N. Rothbard Classical Economics. An Austrian Perspective on the History of Economic Thought. Cheltenham, UK: Edward Elgar Publishing. Cheltenham 1995 Rothbard III Murray N. Rothbard Man, Economy and State with Power and Market. Study Edition Auburn, Alabama 1962, 1970, 2009 Rothbard IV Murray N. Rothbard The Essential von Mises Auburn, Alabama 1988 Rothbard V Murray N. Rothbard Power and Market: Government and the Economy Kansas City 1977 |
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