slosh down the pepper!

Unlimited Wants, Limited Resources. Who win?

Economics, also known as the study of the efficient allocation of limited resources to maximise the utility level (happiness) of the consumer, is a result of humans' unlimited needs and earth's limited resources. To maintain the otherwise impossible relationship between the two, man learnt to make choices among his competing wants. This, he termed it "opportunity cost". Man probably incurred a significant amount of such costs as he forgoes ideal economic choices in search of the next best alternative.

The birth of the Production Possibility Frontier [PPF] represents the coming together of sarcity, choice and opportunity cost to produce a curve showing all the possible combinations of 2 goods that a country can produce in a given time period with all its available resources and technology. Any combination that does not fall in line with the ideal mix (economic choice) of output production is regarded as a cost incurred to recognize the sacrifice of producing less of Good A for more of Good B. On a different note, any mix that falls outside the curve is unattainable with the current capabilities available. But hey, economics is also a epitome of optimism! Once capabilities (such as technology, capital resources) are improved, an outward shift of the PPF is still possible, with the extent of the shift determined by the advancement of the amount of resources in producing either/both goods.

CHAPTER ONE SHOT DOWN!
I win.

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Heh. Another signal of "SOS" received. A topic that I studied for the first 3 months in JC, and thereafter by act of choice, opted for Biology instead (which I subsequently dropped it after 12 months of struggling). The opportunity cost incurred here proved to be a sum of the cost of loss of face, cost of self-realization of low capability, and the actual definition of cost of lost chances to attain a better understanding of economics which was to affect my studies in U- life.

Hmm... will I be evaluating all my future choices in economic terms and opportunities forgone for the next best alternative?

The PPF states that I should read up Chapter 2 (Good A) first since the opportunity cost associated with forgoing it for Good B (instantaneous decision-making) is relatively high. I shouldn't take the risk.

posted by slingwoof @ 1/19/2006 10:34:00 PM