Opportunity Cost

Opportunity Cost

I recently had to make a purchasing decision when I went to the mall. I had my mindset on buying a new monitor for a computer build that I want to start on shortly. My idea was first to purchase the monitor for a computer build. However, when I got to the mall, I happened to pass by a shoe shop on my way to the tech shop.

I decided to go in and window shop, and I found that they had a pair of shoes that I wanted to own. I then had to make a decision on whether I was still going to purchase the monitor or buy the shoes that I had dreamt of owning for a long time. I decided to buy the shoes because of several reasons.

The reasons include the fact that the shoes were a lot cheaper than the monitor. The shoes were a finished product when compared to the computer build that I had not started. In the end, I found the purchase of the shoes was worth it because I ended up saving money, which I later repurposed for something else. If I had purchased the monitor, I would have had to compromise on some other things. According to Buchanan (1991), opportunity cost exists when faced with different choices.

Reference

Buchanan, J. M. (1991). Opportunity cost. In The world of economics (pp. 520-525). Palgrave Macmillan, London.