Ozzortunity Costs

I explain the concept of Opportunity Cost. I break down the general meaning of it, and the economics meaning of it. I also provide examples of each. Lastly, I break it down on how Oswego Students like myself use the opportunity cost concept without even realizing it.

Podcast creator: Michael Kolawale.

Transcript:

[MUSIC]

Kate: Hey everyone. Welcome to Oz-onomics, a podcast created for and by students in introductory economics classes at SUNY Oswego.

GABRIELLA: In this series, we'll have discussions about various economic principles and how they apply to our day to day lives.

KATE: Are you ready?

GABRIELLA: Let's go.

[MUSIC]

 

Hi, everyone. My name is Michael Kolawole, I will be your host for today on the first ever edition of OZnomics where Economics becomes easier for Oswego students to understand, where you get your money that you pay for your tuition worth. Here on Oznomics, we break economics in a way you can understand, where you need another alternative to understand your economic class. Now I call that a substitute good. *Laughs in the background* So, for the first episode which is called Ozzortunity Cost is going to be all revolved around the concept of Opportunity Cost and how we use it everyday in our lives. It’s one of the most basics concepts of economics yet some may have a trouble understanding it. First, In order to examine how it is used in our everyday life, you must first examine what it is. Now get out your pen, your paper, your pencil, or take out your phone and use the notes app. We first begin with the definition. Definition: Now, to keep it short and sweet, Opportunity Cost is what you give up to get, what you give up to buy for other goods or services. Now if an economist were to say what is Opportunity Cost? They would tell you it is the value of the next best alternative. So, pretty much opportunity cost is used to indicate what must be given up to obtain something that is desired. Everything has an opportunity cost. It does not matter what it is. Opportunity Cost is simply all around us. You can’t escape it at all. Now that we know the definition, now we understand basically the fundamentals go Opportunity Cost. Now, let’s give you some guys some examples to further understand it. Examples: Let say it’s Wednesday in Oswego and on a late Wednesday night it is considered Wing night in Oswego, but you see you missed it. You missed late night because of a meeting. Mind you, you have not eaten all day at all. Being as though you don’t want to spend on your own money on food, you're faced on deciding what to do, what to eat with your dining dollars. Sub Shop being closed leaves you with two choices to get food on GET FOOD. The two choices are: Domino’s or Wonzones. Now if you choose to get Domino’s, you give up the opportunity to get Wonzones. Now if you choose to get Wonzones, you give up the opportunity to get Domino’s. Wether you choose Domino’s or Wonzones regardless if you picked one of them, your giving up the opportunity to not get the other and that is Opportunity Cost in it’s basic form. However, what if I told you everything you did throughout that Wednesday in Oswego you basically did it with Opportunity Cost in mind and you might not have thought about it but that’s whatcha did throughout the day, making Opportunity Costs. Let me explain. So, On Wednesday I have an 8AM class In Lanigan I know that The bus leaves in the Middle of Waterbury and Riggs at around 7:45AM. So, I developed a routine of mine to wake up at 6:45am every morning. I spend around 20 minutes showering brushing my teeth which makes me done at approximately 7:05am. I spend another 20 minutes eating to makes me done at 7:25am. I spend another 15 minutes getting ready packing up stuff for class and just stuff I need to do throughout the day which takes 15 minutes to do and I finish it around 7:40am. That leaves me with about 5 minutes to catch the bus at 7:45am. It takes 2 minutes for the bus to get to Lanigan Hall for class and it takes 1 minute for me to get to class when I arrive in the building. So, I arrive in the actual classroom at 7:48am which is 12 minutes early before the 8am start time of class. Now the opportunity cost sometimes I always consider of: Do I have to necessarily go to class? No not really. See if I decide to not go to class. I gain more sleep. That’s what I gain from that. However, I give up learning the material covered in that class for that day. Now, being as though I want an A in the class and I believe hardwork is the way that hardwork Is just the better way and if I’m paying for class I might as well get what I put in. I believe that it worth me giving up more sleep and going to class and getting the A I rightfully deserve. To me that is the best opportunity cost I can make as opposed to skipping class and gaining more sleep which is also an Opportunity Cost. Now, Opportunity Cost is also one of those things you can do mathematically. Opportunity Cost does not necessarily mean it’s always a numerical thing but it can be. It also can be calculated. Let’s say I want to get more sleep and I decide to wake up at 7:30am. So, I don’t necessarily miss class… I can make it to class. However it would take me a little bit longer to get ready and do the stuff I know I should be doing if I wake up at 6:45am. So I decide the next best alternative is to rush to get to class. Since being as though I woke up at 7:30am. I rush to shower eat a pop tart simply brush my teeth and get dressed and I finish all this by 7:52pm. The bus is already gone so I have to walk it. I walk to class which is about a six minute walk from Waterbury & Lanigan which also accounts for arriving to the building and finding the class room). I arrive to class at & 7:58am which is still early But I normally arrive there at 7:48am. So My Question is? How much time did I give up on making sure I am properly prepared and being early if I just woke up when I am supposed too as opposed to giving my body more sleep. So we first write on our papers: 7:30am (which was the time I got up late Then we write - 6:45am (which was the time I normally get up) So if you minus 7:30am - 6:45am you should get 45 minutes. So I gave up 45 minutes of prep time to sleeping. That being said but because I woke up late at at 7:30am and I arrived to class late at 7:58am. If I woke up on time at 6:45am and did my normal routine I would have arrived at class at 7:48am. So when it comes to figuring out how much time I gave up to arrive earlier we do 7:58am - 7:48am and it gives us 10 minutes. So I gave up an additional 10 minutes to arrive early because I woke up late at 7:30am. Outro: Now to conclude this for all my proud lakers out there remember Opportunity Cost is a choice in your everyday life you are responsible for making wether it is good or bad. It is the next best alternative and it is what we give up to get. I hope with the explanation and the examples of Opportunity Cost blending in with the Life of an Oswego Student you furthered understood the concept. This is Oz-onomics and I’m your host Michael Kolawole and I look forward to helping your understanding of economics easier next time.

[MUSIC]

MICHAEL: There you have a folks on another edition of Oz-onomics, where economics becomes easier for Oswego students to understand where you get your money that you pay for your tuition worth. If you feel like being ahead of the curve, grab a seat, grab your phone, shift your fingers left and right. And download Oz-onomics on the podcast app. See you later.

 The introduction to this podcast was provided by Kate Soanes and Gabriella Schaff. Michael Kolawale provided the outro. Music by Lobo Loco.