Monday, October 31, 2016
opportunity cost
Σ costs of path taken-Σ costs of path not taken=> max positive-best path
positive-you didn't choose the worst path
negative-you didn't choose the best path
max negative-you chose the worst path
Where the costs are the sums of each path individually, not the costs of the paths added together
Recall mutually exclusive-"...two propositions (or events) are mutually exclusive or disjoint if they cannot both be true (occur)"
“Judge your success by what you had to give up in order to get it.” ― Dalai Lama
“It is very rare or almost impossible that an event can be negative from all points of view.” – Dalai Lama
"...In microeconomic theory, the opportunity cost of a choice is the value (NOT A BENEFIT) of the best alternative forgone where, given limited resources, a choice needs to be made between several mutually exclusive alternatives. Assuming the best choice is made, it is the "cost" incurred by not enjoying the benefit that would have been had by taking the second best available choice.[1] The New Oxford American Dictionary defines it as "the loss of potential gain from other alternatives when one alternative is chosen." Opportunity cost is a key concept in economics, and has been described as expressing "the basic relationship between scarcity and choice."[2] The notion of opportunity cost plays a crucial part in attempts to ensure that scarce resources are used efficiently.[3] Thus, opportunity costs are not restricted to monetary or financial costs: the real cost of output forgone, lost time, pleasure or any other benefit that provides utility should also be considered an opportunity cost."-wikipedia
positive-you didn't choose the worst path
negative-you didn't choose the best path
max negative-you chose the worst path
Where the costs are the sums of each path individually, not the costs of the paths added together
Recall mutually exclusive-"...two propositions (or events) are mutually exclusive or disjoint if they cannot both be true (occur)"
“Judge your success by what you had to give up in order to get it.” ― Dalai Lama
“It is very rare or almost impossible that an event can be negative from all points of view.” – Dalai Lama
"...In microeconomic theory, the opportunity cost of a choice is the value (NOT A BENEFIT) of the best alternative forgone where, given limited resources, a choice needs to be made between several mutually exclusive alternatives. Assuming the best choice is made, it is the "cost" incurred by not enjoying the benefit that would have been had by taking the second best available choice.[1] The New Oxford American Dictionary defines it as "the loss of potential gain from other alternatives when one alternative is chosen." Opportunity cost is a key concept in economics, and has been described as expressing "the basic relationship between scarcity and choice."[2] The notion of opportunity cost plays a crucial part in attempts to ensure that scarce resources are used efficiently.[3] Thus, opportunity costs are not restricted to monetary or financial costs: the real cost of output forgone, lost time, pleasure or any other benefit that provides utility should also be considered an opportunity cost."-wikipedia
Subscribe to:
Posts (Atom)