A brief glance on implicit and explicit Opportunity cost

[Accardo]

We live in a world of scarcity, and limited resources, the discussion here is about the ways we go about purchasing and doing all that we want to achieve with the limited resources we have. Talking about resources money is not involved, it's not a resource. On a basic term, Opportunity cost is the yes we say to one product or activity that translates to saying no for another product or activity. It comprises of two types; explicit and implicit.

Explicit stands for the products we choose to buy over another product, how we prefer to say I'd get rice instead of meat, give me Adidas I do not want Nike, indirectly tells us that economics is more about choices and decision making. These choices and decision connects to contribute to the overall micro and macro economy. It's like the body system, all parts of the body connects to keep us healthy. The decision to spend $100 on a per of shoes connects with another person's decision of spending that same $100 on a book to facilitate the supply chain. People must give up one product to have another, but the best part of this type of opportunity cost is that it teaches us how crucial our self interest is to the economic flow of our nation.

Implicit Opportunity cost is the opposite of explicit, this has no business with spending money, it's about how we spend our time on things we either paid for or on our personal thoughts. It's typically something that has to do with why she chose you over your friend. Don't get it twisted, I wouldn't want any man to feel bad about this, but I'd rather say, why she chose your friend over you Implicit is about existing, choice is what makes us exist, why we breathe, walk, read, eat some varieties of foods, some of this decisions doesn't require money from us. Choosing to read the book we bought for a $100 over going for a party, or to do a part time job that would pay off in cash, translates to the opportunity cost of the fun and money we'd be missing out from the two alternative choices I just gave.

To retain the spark of this conversation, it's important we share for future traces, what and what we give up for another, are you a Nike guy, do you prefer Bitcoin over Solana, did she choose you over another guy, probably yes, what would you prefer to do with a $100 bill, would you buy a shoe, go to the cinema, or buy some clothes etc. There are millions of alternatives we give up on a daily basis due to limited resources and scarcity, how do you cope, do you say next time I'd do this or get this, I don't have the money now, does it bother you? please share. Thank you for reading this piece, I'm happy about that. 

[lovesmayfamilis]

I tried reading it twice, but it's still difficult... forgive me🤔. How do my preferences affect my country's economy? I'll put it another way: "You're good for what you studied for." If you are an educated person with a good income, you will choose meat or rice in two ways: either you do not eat meat, or you do not eat rice. There is no point in talking about savings here. It's the same with clothes and everything else.

The other part, which you call "Implicit Opportunity cost," is also not clear, however... There will also be several options for choosing a partner, and if we talk about female and male, then there are different preferences. Someone is looking at the identity; someone is looking at the wallet. Benefit and sympathy are very distant and different things nowadays and rarely go "toe to toe."

As a result, and what I realized, I think that someone who has great opportunities that don't make them think much about shopping may also have disadvantages. This applies to the second part. But everything that relates to material things is much easier and more feasible because of that. What you can't buy today, with your diligence, will be bought by you tomorrow. However, it is very difficult to buy sympathy, or what people call "sincere love," even for a rich person in some cases🤷‍♀️.

[Die_empty]

There are millions of alternatives we give up on a daily basis due to limited resources and scarcity, how do you cope, do you say next time I'd do this or get this, I don't have the money now, does it bother you? please share. Thank you for reading this piece, I'm happy about that. 

Resources are becoming more scarce as inflation keeps eating deep into income. There are so many wants that have to be dropped from my scale of preference. The goal now is to survive, save, and invest. So I spend more on basic needs to enable me to save a little. I ensure we eaat balance diet, have good accommodation, clothing, education, and health care. Activities like vacation and other non-basic needs would have to wait till the economy improves.

The economic condition bothers me, but I don't waste time worrying. Rather, I seek ways to get solutions. I try to cut costs, save, and invest to get more than one source of income.

[Coyster]

I tried reading it twice, but it's still difficult... forgive me🤔. How do my preferences affect my country's economy?

Well, maybe it can, though i am not sure how significant it can be in shaping the economy. When we're talking about the broader economy, it is no longer about just your preferences, but that of everyone else, including organizations, industries and even the government. What's key here is to understand that opportunity cost helps in decision-making.

So, when entities consider what the next best alternative is, and what value they would lose if they choose the other option, they make better decisions that could transcend into a more productive economy.

[Dr.Bitcoin_Strange]

These choices and decision connects to contribute to the overall micro and macro economy.

The decision to spend $100 on a per of shoes connects with another person's decision of spending that same $100 on a book to facilitate the supply chain. People must give up one product to have another, but the best part of this type of opportunity cost is that it teaches us how crucial our self interest is to the economic flow of our nation.

If I understand this part correctly,  what you are implying is that, human choices and decisions also drives the economy, right?
The way this thing works, producers already knows what is needed by humans for survival and so, what is mostly needed by people is what is being produced, the human choices doesn't have so much of an influence apart from the fact that some companies might record more sales and make more profit than competitors because a lot of people chooses their products over others.

The human choices and decision in terms spending is mostly to the person's self advantage. If for example, I have $100 and instead of buying shoe with it, I decided to buy an educative course to be able to learn something for self development, that's basically to my own advantage and self growth, except it's something related to creating value, that's when I contribute more to the economy.

In the aspect of why someone is chosen or not, these are also related to achievement, personal growth, financial status, etc. Even if it's the man that has to choose a partner, with wealth, you can not buy a good partner since someone can pretend to be good to achieve a goal.

[Obim34]

~snip

Your topic is all about priority choices and affordability. Everyone will settle for personal choices over what will benefit the economy.

Let's say you own a manufacturing company that requires 100 laborers and produces 1000 cartons of goods in a day, you had the opportunity to own a machine that does X10 the work done compared to human efforts, do you handle the situation by neglecting the machines to keep them employed, or are they immediately robbed of their jobs? Dropping them from the job automatically makes them unemployed, and we know what increase rate of unemployment does to the economy.

[programmer3666]

Opportunity cost is just a big word for what you are missing out on when you pick one thing over another. Every choice comes with a trade off. The explicit one is the stuff you pay for like choosing rice over meat or buying Adidas instead of Nike. That affects your wallet and the economy around you. The implicit one is the time you spend doing one thing instead of another. Reading a book instead of going to a party or studying instead of working a side job. You don't see the cost, but it is still there.  We are always giving up something to get something else. That is just how it is. Not something to stress about though just a reminder that every choice matters, even the small ones.

[DPHOR]

To retain the spark of this conversation, it's important we share for future traces, what and what we give up for another, are you a Nike guy, do you prefer Bitcoin over Solana, did she choose you over another guy, probably yes, what would you prefer to do with a $100 bill, would you buy a shoe, go to the cinema, or buy some clothes etc. There are millions of alternatives we give up on a daily basis due to limited resources and scarcity, how do you cope, do you say next time I'd do this or get this, I don't have the money now, does it bother you? please share. Thank you for reading this piece, I'm happy about that. 

This boils down to individual differences and choice of action to how we see things and reacts to it, and yes there are people who works based on their choices while there are people or some people who live by simply trying to imitates what others does because they do not have a personal say of their own, this includes having their parents to make decisions for them but or having to influence them. People today has lost many opportunities due to how their friends, family members or relatives do not actually love a particular investment that either they had similar or previous experience from their investments that they wouldn't want to make that mistake and ended up having not to invest in Bitcoin because they had no personal say of their own.

[viljy]

So what? Marketing exists in order to manage people's choices, including, as you call them, to determine explicit and implicit choices. For example, the De Beers company has spent a lot of effort to instill in the minds of people in the Western world the myth that the groom must certainly give the bride a diamond ring.

In general, many of the "I want this, but not that" decisions are not at all a subjective choice of a person, but a psychological attitude programmed by advertising or subtle marketing. The same applies to people's implicit choices. So the economy has long been influenced not by people, but by corporations. Demand is created where corporations need it. More examples. People were convinced that it was necessary to have two or more cars in a family; they were also convinced that a smartphone should be changed to a new model every year.

The mechanism of influence on decision-making also operates through social networks (everyone should be thin; everyone should relax at a certain fashionable resort; everyone should buy exactly this fashionable something) through "social condemnation" (fear of being a black sheep). This is the lack of freedom of choice. That is, most people make choices to please society... that is, people who are strangers to them.

[Accardo]

I tried reading it twice, but it's still difficult... forgive me🤔. How do my preferences affect my country's economy? I'll put it another way

In addtion to what Coyster said, you're not the only person with this preference, like I said, using the body system as an example, the nervous system and the respiratory organs are of different parts of the body, but they contribute to the wellbeing of the entire body. The decision you make in buying 10 tubers of yam over a bucket of beans is in connection with over 1 million other people who took a similar choice. Moving back to how this affects your nations economy. Lets use USA and APPLE for example, if the world preference or the citizens of America starts going for Samsung over Apple, the economy of America will suffer tens of billions of dollars in losses, and that of South Korea will surge higher. Here is it, the government have no right over what product we vote for with our money, companies cater directly to consumers to generate money that'll be paid to the government in Tax to take care of security, road infrastructure etc. In its term, this collaboration is mixed economy, if a thing like this should happen in the US, the Government will have no other option than to increase Tarrifs for South Korea, and as well subsidize apple product to make it cheaper than Samsung, to change the people's preferences back to Apple.

The other part, which you call "Implicit Opportunity cost," is also not clear, however... There will also be several options for choosing a partner, and if we talk about female and male, then there are different preferences. Someone is looking at the identity; someone is looking at the wallet. Benefit and sympathy are very distant and different things nowadays and rarely go "toe to toe."

When talking about complex terms like Opportunity cost, deploying relatable examples helps us understand better what its about, the example I used regarding a woman's decision or preference on certain men made it to this thread because there is a Trade off. In the world of economics this example is not acceptable as it has to do with human feelings, which is a different aspect of life. However, let's move further to build on this example to clarify how implicit opportunity cost work by looking into the trade offs, if a woman says, I prefer a tall, handsome looking man over a short, handsome looking man, you'd get to find out the trade offs with the attributes of the short and handsome looking person she's missed, for example the short person could be very intelligent, caring, kind, and rich, but for her preference she missed out on all of that, for the sake of a tall looking man with an entirely different attribute which could be good, but never similar. The implicit opportunity cost of her decision is found in all of the things she has missed out for not choosing the short man.

In economics, a better example to this type of opportunity cost is, when you choose to live in a house you own instead of renting it out, the implicit opportunity cost is the thousands of dollars you're missing out for not renting the house. Another example, when you choose to hang out with friends, instead of working overtime, the opportunity cost of hanging out with your friends is the amount of dollars you'd lose for not working additional time, and also the money you'd spend while having this fun. In a clearer term, implicit opportunity cost is more about the resources we already own, like time, house, or a car, the alternative we trade off for the things we have. Why it makes sense for the example above regarding a woman and man choosing one another, is because these people own the time to analyze or make this decision.

[bitLeap]

Whether I'm right or not in digesting what the OP says, but some of the points I catch are about the impact of individual decisions. Do not focus on what you sacrifice and cannot choose because basically someone chooses to live in a way, then he must be ready and accept that B, C and D ways will not be part of his life. You know? what you didn't choose at the time doesn't necessarily suit you, it could be that what you regret choosing actually managed to shape your mindset, personality, and way of life.

[steve5946]

We live in a world of scarcity, and limited resources, the discussion here is about the ways we go about purchasing and doing all that we want to achieve with the limited resources we have. Talking about resources money is not involved, it's not a resource. On a basic term, Opportunity cost is the yes we say to one product or activity that translates to saying no for another product or activity. It comprises of two types; explicit and implicit.

Explicit stands for the products we choose to buy over another product, how we prefer to say I'd get rice instead of meat, give me Adidas I do not want Nike, indirectly tells us that economics is more about choices and decision making. These choices and decision connects to contribute to the overall micro and macro economy. It's like the body system, all parts of the body connects to keep us healthy. The decision to spend $100 on a per of shoes connects with another person's decision of spending that same $100 on a book to facilitate the supply chain. People must give up one product to have another, but the best part of this type of opportunity cost is that it teaches us how crucial our self interest is to the economic flow of our nation.

Implicit Opportunity cost is the opposite of explicit, this has no business with spending money, it's about how we spend our time on things we either paid for or on our personal thoughts. It's typically something that has to do with why she chose you over your friend. Don't get it twisted, I wouldn't want any man to feel bad about this, but I'd rather say, why she chose your friend over you Implicit is about existing, choice is what makes us exist, why we breathe, walk, read, eat some varieties of foods, some of this decisions doesn't require money from us. Choosing to read the book we bought for a $100 over going for a party, or to do a part time job that would pay off in cash, translates to the opportunity cost of the fun and money we'd be missing out from the two alternative choices I just gave.

To retain the spark of this conversation, it's important we share for future traces, what and what we give up for another, are you a Nike guy, do you prefer Bitcoin over Solana, did she choose you over another guy, probably yes, what would you prefer to do with a $100 bill, would you buy a shoe, go to the cinema, or buy some clothes etc. There are millions of alternatives we give up on a daily basis due to limited resources and scarcity, how do you cope, do you say next time I'd do this or get this, I don't have the money now, does it bother you? please share. Thank you for reading this piece, I'm happy about that. 

Scarcity isn't limited to money. Time, attention, energy, and even opportunities are limited resources that people are constantly making trade-offs with, whether they realize it or not.

Choosing to spend two hours learning a skill means giving up two hours that could have been spent working, relaxing, or doing something else. The difficult part is that we often don't recognize the cost because there isn't a price tag attached to it.

[Accardo]

So the economy has long been influenced not by people, but by corporations. Demand is created where corporations need it. More examples. People were convinced that it was necessary to have two or more cars in a family; they were also convinced that a smartphone should be changed to a new model every year.

However you want to make it sound, who influences a decision or not, the thing is that it all falls under opportunity cost. Also to get things clear the corporate bodies you talk about are not some aliens, they're humans who come up with these decisions. What other point are you trying to make?

[Curious T]

Talking about resources, money is not involved, it's not a resource.

How is money not a resource? I don't see any situation where money is not a resource. So you can't take it out when talking about resources, so I don't understand what you mean here.

To retain the spark of this conversation, it's important we share for future traces, what and what we give up for another, are you a Nike guy, do you prefer Bitcoin over Solana, did she choose you over another guy, probably yes, what would you prefer to do with a $100 bill, would you buy a shoe, go to the cinema, or buy some clothes etc. There are millions of alternatives we give up on a daily basis due to limited resources and scarcity, how do you cope, do you say next time I'd do this or get this, I don't have the money now, does it bother you? please share. Thank you for reading this piece, I'm happy about that. 

You mistake preference with opportunity cost. The fact that I went to a cinema over going to the club doesn't make the club my opportunity cost. It may simply mean I don't want to go clubbing, but I want to go to the cinema to go see a movie. For it to be opportunity cost, then both the cinema and the club are both things I want to do, but I have money or time for only one, so I have to choose which one I would do and forgo the other. The same goes for your example of Nike and Adidas. I may prefer Adidas over Nike and buy the Adidas shoes. The Nike shoes were not an opportunity cost.

Opportunity cost is when you forgo something that you would have ordinarily liked and choose another alternative simply because you can't afford both of them at that time.

[Filicius]

So the economy has long been influenced not by people, but by corporations. Demand is created where corporations need it. More examples. People were convinced that it was necessary to have two or more cars in a family; they were also convinced that a smartphone should be changed to a new model every year.

However you want to make it sound, who influences a decision or not, the thing is that it all falls under opportunity cost. Also to get things clear the corporate bodies you talk about are not some aliens, they're humans who come up with these decisions. What other point are you trying to make?

I believe that both the OP's contribution on the definition of opportunity cost and viljy's comment on the influence on demand are interesting and not mutually exclusive.

I share the summary of a curious experiment that has to do with both ideas: next to a Coca-Cola machine they installed a Pepsi machine, and against all odds Coca-Cola sales increased. This happened not because people didn't buy Pepsi (they also bought it), but because of something deeper: by installing the second machine, they managed to change the question that many potential consumers were asking themselves from "Do I fancy a soft drink?" to "Do I rather have a Pepsi or a Coke?".

[Cryptomultiplier]

There are millions of alternatives we give up on a daily basis due to limited resources and scarcity, how do you cope, do you say next time I'd do this or get this, I don't have the money now, does it bother you? please share. Thank you for reading this piece, I'm happy about that.  

Resources are becoming more scarce as inflation keeps eating deep into income. There are so many wants that have to be dropped from my scale of preference. The goal now is to survive, save, and invest. So I spend more on basic needs to enable me to save a little. I ensure we eaat balance diet, have good accommodation, clothing, education, and health care. Activities like vacation and other non-basic needs would have to wait till the economy improves.

The economic condition bothers me, but I don't waste time worrying. Rather, I seek ways to get solutions. I try to cut costs, save, and invest to get more than one source of income.

Sometimes I wonder what keeps causing inflation because at a time, we were sure in my country that it's because Iran and U.S/Israel were at war that we had increased fuel price, but that isn't even the case because before the war, there has been inflation and now things keep increasing every week.

It's more of a survival lifestyle and scale of preference over luxury standard and trying to show off because that's what keeps one healthy and sound. Worry causes much more problems and hospital bills are over the roof, so why stress over something we can't change instead, it's to find a solution to increase income earnings and keep cost down while trying to invest to get good returns.

I think risk management practices is still important these days because it involves keeping emotional control in check, financial management in check, and being healthy and safe to avoid losing much more during rising inflation and standard of living.

[BlackHatCoiner]

Explicit opportunity cost is me buying Bitcoin over Solana because I prefer a blockchain that doesn't take weekends off.

Implicit opportunity cost is me spending three minutes replying to this thread instead of touching grass.

Did I name them right?

[Accardo]

How is money not a resource? I don't see any situation where money is not a resource. So you can't take it out when talking about resources, so I don't understand what you mean here.

Money is not even what you call capital, money cannot produce anything that's why it's not a resource. There are four factors of production in economics, which makes up for what we mean as resources; Land, Labor, Capital (Machines and tools used in the factory) and entrepreneurship.

You mistake preference with opportunity cost. The fact that I went to a cinema over going to the club doesn't make the club my opportunity cost. It may simply mean I don't want to go clubbing, but I want to go to the cinema to go see a movie. For it to be opportunity cost, then both the cinema and the club are both things I want to do, but I have money or time for only one, so I have to choose which one I would do and forgo the other. The same goes for your example of Nike and Adidas. I may prefer Adidas over Nike and buy the Adidas shoes. The Nike shoes were not an opportunity cost.

Opportunity cost is when you forgo something that you would have ordinarily liked and choose another alternative simply because you can't afford both of them at that time.

Did you just start an argument so you'd answer it at the end of your paragraph? With the part in bold, what makes it different from preference? Opportunity cost works with preference, what do you mean I confused it with preference. I don't think I ever mentioned anywhere that the person won't necessarily need what they traded off, go through the first line of the thread. In simpler term, whatever thing or activity you'd say, had I owned the opportunity, I'd get this or do this, falls under opportunity cost.

Explicit opportunity cost is me buying Bitcoin over Solana because I prefer a blockchain that doesn't take weekends off.

Implicit opportunity cost is me spending three minutes replying to this thread instead of touching grass.

Did I name them right?

Yes you're spot on, the implicit opportunity cost for not touching grass is the natural air, fun, and collaborations you missed out for choosing to read and reply to this thread.

[Curious T]

Money is not even what you call capital, money cannot produce anything that's why it's not a resource. There are four factors of production in economics, which makes up for what we mean as resources; Land, Labor, Capital (Machines and tools used in the factory) and entrepreneurship.

You cannot say money is not a resource when you are talking about resources used to buy things that a person needs. Don't you see how you contradict yourself? Money is a financial resource, and without this particular resource, you cannot acquire or keep the factors of production you speak of. Land, Labour, and capital cannot be gotten without money, so that makes money a resource.

Did you just start an argument so you'd answer it at the end of your paragraph? With the part in bold, what makes it different from preference? Opportunity cost works with preference, what do you mean I confused it with preference. I don't think I ever mentioned anywhere that the person won't necessarily need what they traded off, go through the first line of the thread. In simpler term, whatever thing or activity you'd say, had I owned the opportunity, I'd get this or do this, falls under opportunity cost.

No, preference is not the same as opportunity cost. Preference is simply what I prefer, while opportunity cost has to do with what I can afford. I used the example of Nike and Adidas for you. I can have all the money in the world and still prefer Adidas. The Nike shoe I did not buy is not an opportunity cost. It will only be an opportunity cost when I want both a Nike and an Adidas shoe, but I can only afford an Adidas, and since I need the Adidas more, I will forgo the Nike. In this case, it is not a preference. You can read it up to get a better understanding of the difference. 

[9ja Amaka]

If I understand this part correctly,  what you are implying is that, human choices and decisions also drives the economy, right?
The way this thing works, producers already knows what is needed by humans for survival and so, what is mostly needed by people is what is being produced, the human choices doesn't have so much of an influence apart from the fact that some companies might record more sales and make more profit than competitors because a lot of people chooses their products over others.

The human choices and decision in terms spending is mostly to the person's self advantage. If for example, I have $100 and instead of buying shoe with it, I decided to buy an educative course to be able to learn something for self development, that's basically to my own advantage and self growth, except it's something related to creating value, that's when I contribute more to the economy.

In the aspect of why someone is chosen or not, these are also related to achievement, personal growth, financial status, etc. Even if it's the man that has to choose a partner, with wealth, you can not buy a good partner since someone can pretend to be good to achieve a goal.

There is a thin line between choices and decisions.

Decisions don't drive the economy, but individual choices can collectively drive the economy in regards good and services demand, consumption, and supply.

In most markets, demand is what triggers production, while in some it is the opposite. If you are in any market, learn what the choice of the consumers is. It helps a lot.

Last, the most common factor that drives the economy we all know is bad government. Government debt, poor infrastructure facilities, and insecurity shift the economy towards the worst side in society.