And so I’m sitting here after Economics class thinking about what I could possibly blog about when it keeps coming back to me — Trade-offs and Opportunity Cost.
According to the textbook, Trade-offs can be described as “sacrificing one good or service to purchase or produce another.” That is closely associated with its cousin, Opportunity Cost, which can be defined as “the value of the next best alternative given up for the alternative that was chosen.”
Now, when we talk in Economics, we’re usually talking about money, but not always. For example, we might say that you are in a store. You have $3 and can purchase a Snickers and a can of Mountain Dew, or you can buy a 20 ounce bottle of water and a pack of gum. You could also save the money and not get a snack.
There you can see many trade-offs and the options listed are simple and not even indicative of the options you would even find at a regular Wal-Mart or Target. But, essentially that’s what a trade-off is — looking at what the options are and picking one. The one option (or multiple options) would be the trade-offs. You pick the Snickers and the Mt. Dew, you are trading that for a possibly healthier choice of water and gum. Or trading for the chance to save your money to buy something bigger and better in the future.
And that’s where Opportunity Cost comes in.
What is the value of that trade-off? There is some kind of value, monetarily or just perceived, to the choice you made.
Let’s forget the shopping trip for a second and look at you after work.
You come home, take off your shoes, put on a pair of comfy pants, sit in your favorite recliner and…. what?? What do you choose to do? Do you:
- Read a book?
- Watch The Real Housewives of Atlanta?
- Learn a foreign language?
- Watch Cosmos?
- Pick up the iPad for a rousing game of Candy Crush?
- Make a craft?
- Write a book?
- Spend all night on Facebook and Twitter?
- Write a blog?
- Call a family member?
- Leave the house entirely for a walk or hit the gym?
Again, there is no way I could possibly list all the potential alternatives you find yourself with each and every day. We all have our jobs and there are little options in that area. We go to work, slave away for the man, and earn a paycheck.
But…it’s the moments we have to ourselves that define us. They make us who we are.
If we just sit around all night watching the tube, what does that say about us?
If we play game after game of some mindless app on our phones or tablets, what kind of person are we?
But…if we choose to expand ourselves, to reach beyond what we are comfortable with and what we believe we can do, we can literally change who we are. What is the opportunity cost if we watch hour after hour of the Food Network and never once even attempt the recipes we see? What are we missing out on?
To be honest, I’ve gotten busy with school lately, so my writing has taken a bit of a backseat until summer hits. I’ve written a little, but I gotta pay the bills right now. My evenings right now are spent recuperating from school, so mindless distractions are not always a bad thing and I won’t say they ever are. However, at some point we get stuck in that rut. We don’t get up and we let the distractions become our entire lives.
Look at the trade-offs in your life and what the opportunity costs are? What can you do to make your life fuller? What are you missing out on by not looking at the alternatives all around?