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 the difference between decreasing marginal returns and negative marginal returns?

"Micron" is a company,providing micro financing facility for various business entities.So far Micron has been in operation for seven years facilitating new business ventures and ex

Wholemark is an Internet order business that sells one popular New Year greeting card once a year. The cost of the paper on which the card is printed is $0.50 per card, and the cos

Circular Flow of Income: The diagram shows Real Flow (goods and services) and Monetary Flow (Income and expenditure). The bottom pair of arrows depicts the goods market.

STRATEGIES AND POLICIES FOR ADMINISTRATIVE REFORMS: As stated in a United Nation's Publication, following strategies and policies are necessary to bring about administrative i


explain abnormal profits and normal profits

Disadvantages of division of labour: Division of labour may also have disadvantages that may include the following: (i) Lack of Craftsmanship Division of labour does not m

what is the use of models in economics?

Explain why subsidies to domestic firms act as a trade barrier. A trade barrier is broadly explained as any market intervention whereby the ratio of price of exports to price o