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As a representation of the relationship between scarcity and choice, [2] ... Opportunity cost is the concept of ensuring efficient use of scarce resources, ...
A PPF illustrates several economic concepts, such as allocative efficiency, economies of scale, opportunity cost (or marginal rate of transformation), productive efficiency, and scarcity of resources (the fundamental economic problem that all societies face).
[1] Scarcity is the limited availability of a commodity, which may be in demand in the market or by the commons. Scarcity also includes an individual's lack of resources to buy commodities. [2] The opposite of scarcity is abundance. Scarcity plays a key role in economic theory, and it is essential for a "proper definition of economics itself". [3]
Opportunity cost is also often defined, more specifically, as the highest-value opportunity forgone. So let's say you could have become a brain surgeon, earning $250,000 per year, instead of a ...
Scarcity rent is one of two costs the extraction of a finite resource imposes on society. The other is marginal extraction cost--the opportunity cost of resources employed in the extraction activity. Scarcity rent is the cost of "using up" a finite resource because benefits of the extracted resource are unavailable to future generations.
Neoclassical economists defined economic rent as "income in excess of opportunity cost or competitive price." [9] According to Robert Tollison (1982), economic rents are "excess returns" above the "normal levels" that are generated in competitive markets. More specifically, a rent is "a return in excess of the resource owner's opportunity cost ...
Last updated Dec. 19. Learn more about homebuying difficulty in most U.S. counties based on factors such as affordability, available homes, homebuying competition and economic stability.
The opportunity cost of any activity is the value of the next-best alternative thing one may have done instead. Opportunity cost depends only on the value of the next-best alternative. It does not matter whether one has five alternatives or 5,000. Opportunity costs can tell when not to do something as well as when to do something. For example ...