Sample Coursework Paper on the Principle of Opportunity Cost

The opportunity cost of doing an action is the value of the benefits of the alternative foregone. In my case, I chose to UEFA champion’s league match, instead of revising for my exams that I was to sit for, the next morning. To an extent, I considered marginal benefits to the marginal cost. The marginal cost here was the fact that I may fail my exams, which would hurt my grades. The marginal benefits then would be the thrill I got from watching the game instead of studying.

The principle also applies to production possibility curve analysis. When a firm produces more than one right, it may focus on one commodity that benefits the firm more than the other. The cost foregone in producing a real product will be the interest accrued in building a good B. This will affect how the production possibility curve of the firm will look like. In our daily lives, the PPC should help us to make choices, basing on the benefits the opportunities accrue to us.

On my recent visit to Walmart, I noticed that it produces and sells a variety of products. Walmart seems to have studied the market. In its production, it focuses on the different aspects of life. They looked at the market and noticed what combination of goods customers wants, and how they want them to be. The market has two forces known as; demand and supply. The two forces differ from place to place, but they determine what goods and services to be offered and at what time. The acceptance or rejection of the commodities will determine if they should continue being produced. In a capitalist system, the government would make most of the decisions about production but in the socialist system, the market forces decide (Siebert 163-165).

Work Cited

Siebert, Horst. Economics of the Environment: Theory and Policy. London: Springer, 2008. Print.