First econ Essay Example | Topics and Well Written Essays - 500 words

First econ - Essay Example The term opportunity cost in the study of economics is used to refer to the cost associated with the next best option given up (Siebert 163). This means that while making a decision of whether to buy or consumer product A or product B, individuals end up facing a cost when they give up the benefits that they may have gained from consuming product A if they had forgone product A and consumed product B. These costs can include both monetary as well as psychological costs. I experience the application of opportunity cost in my daily life when I have to choose between two things at the same time. For example: I face the issue of opportunity cost when I have to select between studies and my favorite sports of cricket. If I study I face the cost of enjoying the most favorite sport in my life and the physical and health benefits that I may derive from playing sports. On the other hand if I play sports, I give up the benefits of scoring high grades at my educational institute and even may en d up failing which will result in monetary losses. The concept of demand and supply in the study of economics state that when the price for a particular good as well as service is high, it is most likely less in demand and when the price of a particular good or service is high it is most likely more in supply and vice-versa. I have experienced the application of the concept of demand and supply in relation to my hobby of playing cricket. When the prices of cricket bats are on the lower side I am most likely going to buy them but when I go to buy them there are very few bats that may seem attractive, while when the prices are higher I see more and more cricket bats on the shelves and they attract me a lot but I fail to purchase them since they are highly prices. Various economic concepts apply to our daily lives. The concept of opportunity cost is applied in my life when I have to select between studying and