The concept of opportunity cost concerns what one have to give up in order to get something (Marshall, 2013). The application of this concept covers almost everyday’s undertakings within our lives. Just a month ago I opted to pay registration and tuition fee for my brother who had only two units to complete and graduate from college and forgo paying for my younger sister’s fee for joining college at first year. I asked her to defer her studies until next academic year and let our brother to get done with his studies and graduate at last from college.
The alternatives I had at hand to weigh were; first to postpone my younger brother’s completion of two units from campus which would enable him reach the needed number of units meeting the threshold of graduating and register my younger sister into college with the money I had. The second option was to pay the registration and tuition fee for my younger brother and postpone my younger sister’s admission for one academic year.
I felt that it pays much more to ensure that the younger brother is done with his education and graduate in order for him to be able to look for a job with his papers in hand. Hopefully, on securing an employment he will be of great assistance to the younger sister too in financing her education. When I could have opted for the option of paying for the younger sister, the pay-offs may not have been that great since the younger brother who could help after getting a job with his certificates is idle and still qualifies for no formal employment.
Production Possibility Curve (PPC) and Opportunity Cost
The concept of opportunity cost applies in the production possibility curve (PPC) as the alternative arises on how much of consumption should be given up to increase investments. The PPC analysis can be used in determining what we do by examining the choice we should take in ensuring that we consume a given amount of a commodity in order to leave some quantity of resources which would be turned into investments (Dwivedi, D. N. (2006).