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ERIC Number: EJ1091609
Record Type: Journal
Publication Date: 2016
Pages: 5
Abstractor: ERIC
ISSN: ISSN-0022-0485
Opportunity Cost: A Reply
Parkin, Michael
Journal of Economic Education, v47 n1 p35-39 2016
The author's objective for this reply in reexamining opportunity cost was to draw attention to two conflicting definitions of the concept in current use and to argue the case for dropping one of them. The comments of Daniel Arce, Rod O'Donnell, and Daniel Stone might be read as demonstration that the author has failed on both counts. Such a reading would be incorrect. What the three comments do reveal is that the author has not been sufficiently clear in stating the precise point of difference between the two definitions. He also has been remiss in not paying due attention to fact that the concept of value also has two definitions. His lack of clarity about valuation criteria has created confusion on the distinction between the two versions of opportunity cost, and the main goal of this reply is to clear up that confusion. The author believes that when properly stated and understood, the four agree on the most fruitful version of opportunity cost. Because it is the central source of confusion, he begins by examining the distinction between two versions of value. The author then uses the two versions of value to restate in clearer terms the two versions of opportunity cost. He also discusses the problem of identifying the alternative forgone, addresses a few less central quibbles, discusses the importance of a definition, and ends with one more reason to use his preferred version of opportunity cost.
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Publication Type: Journal Articles; Reports - Descriptive; Opinion Papers
Education Level: N/A
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A
Grant or Contract Numbers: N/A