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opportunity costs |
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An important concept in neoclassical economics, where the costs of an action are seen in terms of opportunities forgone. For example, if rural land is set aside as a nature reserve there will be costs to the society and the landowner in terms of the net value of the agricultural products not produced. Similarly a commuter may see the cost of travel time as earnings forgone. The concept can therefore be used in explanations of the allocation of productive resources between competing activities, especially where those resources are in short supply. It plays an important role in theories of rent and comparative advantage, and in linear programming. (AMH) |
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| Other Terms : logical positivism | chi square (Χ | non-parametric statistics |
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