Criticism of opportunity cost, Microeconomics

Criticism of Opportunity Cost

The concept of opportunity cost is criticised on many grounds. Critics observe that it is only a notional cost. The earnings foregone by one person which might have been earned by another may not be invested by the latter. Further, employment market may not be having steady potential to absorb skilled labour at all points of time. The salary and service conditions of those who do skilled labour or take up professional employment need not be comparable.

Hence, assumptions regarding opportunity cost will be valid and meaningful only when there is a demand for skilled labour, waiting time for employment is zero, the income earned is not consumed by the other person (either in part or full) but invested profitably, service conditions are comparable, and so on.

 

Posted Date: 12/17/2012 5:12:28 AM | Location : United States







Related Discussions:- Criticism of opportunity cost, Assignment Help, Ask Question on Criticism of opportunity cost, Get Answer, Expert's Help, Criticism of opportunity cost Discussions

Write discussion on Criticism of opportunity cost
Your posts are moderated
Related Questions
What is Demand Forecasting? Explain in brief various methods of forecasting Demand.

explain the properties of indifference curve with the help of diagrams?

Explain about the term cost function. Cost Functions This function measures the minimum cost of producing a specified level of output for some fixed factor prices. Likewise

THEORY OF REVEALED PREFERENCE: If consumer's taste and preferences do  not change, then observation of her market behaviour or, actual act of choice between the commodity sets

Explain the axioms of completeness, transitivity and non-satiation using appropriate examples.

Vulnerability in international relations: Dominance, dependence and vulnerability in international relations.A greater volume of Ghana’s exports comes from primary commodities

How would you convert from moles of iron(III) oxide to moles of carbon monoxide?

Factors that calculate price elasticity of demand: The proportion of Income spent on the Commodity If the price of a good is relatively low such the expenditure on it is a

List two advantages of markets identified by the authors of the text. Markets can be a significant way of allocating resources.  Markets include voluntary exchanges.  Another b

What is Deflation?  Deflation in economics refers to reduce in the general price level, i.e. the nominal cost of goods and services as well as wages reduce. As, it is an opposi