Tuesday, February 27, 2007
Opportunity Costs
when economists talk about oppurtunity cost they mean that you have some money that you need, and you can use the money, but if you do use the money you are taking a risk because if you lose the money you end up having nothing at all. Oppurtunity cost is kind of goes like the prhase "to earn something you have to lose something". You don't neccesserly get something back, thats why it is called a opportunity cost, you are taking a risk to achieve your goal, a goal that can give you more money then you spent and don't have to worry about financial problem for the rest of you life. For Example if you take a loan from the bank, you can use that money to invest something somwhere so you money can grow, or if you own a house you can sell that house and make profit and out of that profit you can use that money to go to college and if you have enough money left you can buy another house. The last example kind of connects to me, because when im turning 18 i am going to get one of my parents house under my name, so if i dont have enough money to go to college then i would think of selling the house and using the money to go to college.
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