Opportunity costs mean. Theory and problems of its application. Production costs in the short run

The meaning of the concept of opportunity costs or the cost of lost opportunities is that the adoption of any decision of a financial nature in most cases is associated with the rejection of any alternative option. In this case, the decision is made as a result of comparing not direct, but alternative costs.

Imputed (opportunity) costs- losses resulting from the fact that alternative possibilities were not used, which are closest in terms of their effectiveness to the option under consideration. Opportunity cost, also called opportunity cost or opportunity cost, is the amount of churn Money that will occur as a result of the decision, including the income that the company could have received if it had preferred a different option for using its available resources. Lost profit is a loss and should be taken into account when evaluating financial transactions.

AT economic theory Opportunity cost refers to the cost of other products that must be abandoned or sacrificed in order to obtain some amount of this product.

For example, if production areas are allocated for an investment project, which can be sold as an alternative course of action, then the profit (net of taxes) that an enterprise could receive in the event of a sale, when evaluating the effectiveness of the investment project, must be included as imputed, opportunity costs in investment costs.

To formalize decisions taking into account opportunity costs, you can use the flowchart proposed by the English scientist B. Ryan (Fig. 2.1).

Opportunity costs can be external and internal. The sum of the internal and external opportunity costs of any operation is the gross opportunity cost. If making a financial decision requires purchasing materials or hiring new employees, i.e. direct cash costs, talking about external opportunity cost. If it is planned to use an internal resource that is already available at the enterprise and paid for earlier, regardless of the decision made, then they talk about internal opportunity cost. For example, when deciding on the advisability of investing free cash in any assets, the lost profit is taken into account as internal opportunity costs, as lost income from their alternative use, for example, when crediting funds to a deposit.

Rice. 2.1 Flowchart for calculating opportunity costs, English scientist B. Ryan.

The following rules for the practical application of this concept can be distinguished:

1. Upon acceptance financial solutions the manager must take into account all possible alternative options for the use of assets and choose the one in which the excess of possible income over opportunity costs is maximum.

2. In the absence of other alternatives, any solutions that allow at least a minimal increase in capital must be implemented.

3. When making decisions taking into account opportunity costs, cash inflows and outflows that have taken place in the past are not taken into account, since they can no longer be avoided. In this regard, the costs of previously acquired assets at the disposal of the enterprise, including the depreciation of fixed assets and intangible assets, the acquisition of which is not the result of the sale, are not taken into account as alternative costs. this decision.

4. Projects that provide cash inflows, the present value of which exceeds the value of the opportunity costs associated with them, increase the value of the enterprise, that is, make the owners of the enterprise richer.

Opportunity cost is the term for lost profits when one of the existing alternatives is chosen over another. The amount of lost profits is measured by the utility of the most valuable alternative that was not chosen to replace the other. Thus, the law of opportunity costs occurs wherever a rational decision is needed and there is a need to choose between the available options.

The term was first introduced by the Austrian school economist Friedrich von Wieser in 1914 in his work The Theory of the Social Economy.

Determining Opportunity Costs

Thus, the opportunity cost is the cost of any, measured in terms of the value of the next best alternative, that is withheld. This is a key concept in the economy, providing the most rational and efficient use of limited resources. These costs do not always mean financial costs. They also signify the real cost of abstained products, wasted time, pleasure, or any other benefit that provides utility.

Examples of Opportunity Costs

There are many examples of opportunity costs. Every person is faced daily with the need to make a choice between available options. For example, a person who wants to watch two interesting television programs on TV at the same time on different channels, but does not have the opportunity to record one of them, will be forced to watch only one program.

Thus, his opportunity cost would be not being able to watch one of the programs. Even if he were to be able to record one of the programs while watching the other, even then there would be an opportunity cost equal to the time spent watching the program.

Another example is when a person comes to a restaurant and is forced to choose between a $10 steak and $20 salmon. By choosing the more expensive salmon, the opportunity cost is two steaks that could have been purchased with the money spent. And, on the contrary, choosing a steak, the cost will be 0.5 servings of salmon.

Opportunity costs can also be assessed in the decision-making process in economic activity. For example, if on farming If you can produce 100 tons of wheat or 200 tons of barley, then the opportunity cost of producing 100 tons of wheat is 200 tons of barley, which you have to give up.

Definition 1

The opportunity cost is economic term, which denotes lost profits (in particular, income or profit) due to the choice of one of the alternative ways of using various resources and thereby refusing other opportunities.

The size of lost profits can be defined as the utility of the most valuable of the excluded alternatives. Note that opportunity costs are an inseparable part of the decision-making process.

From point of view accounting, opportunity costs are not costs, they are only an economic construct for the analysis of lost alternatives.

Von Wieser's opportunity cost theory

Remark 1

The term "opportunity cost" was first introduced by the Austrian economist F. von Wieser in 1914 in his book "The Theory of Social Economy".

Opportunity costs are expressed not only in kind (in goods, the consumption or production of which had to be abandoned), but also in the monetary equivalent of such an alternative. In addition, opportunity costs can be expressed in the form of lost time from the standpoint of its alternative use.

The main provisions of the theory of opportunity costs:

• productive goods represent the future. Their value depends on the value of the final product;
• due to limited resources, competition arises, as well as alternative methods of their use;
• the subjective nature of production costs determines those alternative possibilities that have to be sacrificed in the process of producing any good;
• any thing is characterized by real utility, which is the lost utility of other things that could be produced using the resources spent on the production of this thing (Wiser's law).

The significance of the theory developed by von Wieser for economic science lies in the fact that it was the first to describe the principles of efficient production.

Opportunity cost calculation

Remark 2

When calculating opportunity costs, it is necessary to highlight irrelevant costs, which include depreciation, rent, general business expenses, and some general corporate expenses. Irrelevant costs do not change, regardless of the decision made.

For example, when making a decision regarding the release of a new type of product, it is necessary to calculate the costs that the enterprise will incur in the production and sale of this new product, then this value is compared with the expected income from its sale.

On the one hand, it seems quite natural for these purposes to apply the calculation of the total cost of the product, multiplied by the planned sales volumes, to obtain the total cost of a new type of product. But this approach misses a key point: a significant proportion of the costs are associated with cash flows that took place even before this decision was made in the past.

Financial management focused on the cash flows that are generated as a result of the implementation management decisions, makes it possible to calculate the opportunity cost based on the amount of the planned cash outflow as a result of this decision. In any case, fixed indirect costs will remain unchanged, so they should not be taken into account opportunity costs.

Investment project efficiency

When calculating the performance indicators of an investment project, one should take into account only the upcoming revenues and costs during the implementation of the project, including those associated with the involvement of previously formed production assets, as well as future losses caused directly by the implementation of the project (for example, from the suspension of existing production due to the organization of a new on his place).

Previously formed resources used in a new project are evaluated not by the costs of their creation, but by the opportunity cost, which reflects the maximum amount of lost profit associated with the best possible alternative for their use.

Thus, the calculation of opportunity costs is commensurate only with direct costs.

opportunity cost- cost of lost profits or costs of alternative opportunities - an economic term denoting lost profit (in a particular case - profit, income) as a result of choosing one of the alternative options for using resources and, thereby, rejecting other opportunities. The value of the cost of lost profits is related to the utility of the most valuable of the alternatives, which turned out to be unrealized. Opportunity costs are characterized by inseparability from decision-making (actions), subjectivity, expectation at the time of the action.

Opportunity costs are not expenses in the accounting sense, they are just an economic construct for accounting for lost alternatives.

A simple example is given by the well-known anecdote about a tailor who dreamed of becoming an English king and at the same time "would be a little richer, because he would sew a little more." However, since it is impossible to be a king and a tailor at the same time, the profits from the tailoring business will be lost. They should be considered the cost of a missed opportunity when ascending the throne. If you remain a tailor, then the income from the royal position will be lost, which will be the cost of a missed opportunity in this case.

Explicit costs- these are opportunity costs that take the form of direct (cash) payments for factors of production. These are: payout wages, interest to the bank, fees to managers, payment to providers of financial and other services, payment of transportation costs and much more. But the costs are not limited to the explicit costs incurred by the enterprise. There are also implicit (implicit) costs. These include the opportunity costs of resources directly from the owners of the enterprise. They are not fixed in contracts and therefore remain under-received in material form. So, for example, steel used to make weapons cannot be used to make cars. Usually enterprises do not reflect implicit costs in the financial statements, but this does not make them any less.

The idea of ​​F. Wieser's opportunity costs

The idea of ​​opportunity costs belongs to Friedrich Wieser, who in 1879 identified it as the idea of ​​using limited resources and initiated a critique of the cost concept contained in the labor theory of value.

The essence of F. Wieser's idea of ​​opportunity costs is that the real cost of any produced good is the lost utility of other goods that could be produced with the resources used for already released goods. In this sense, the cost of producing any good is the potential loss of other, unreleased useful goods. F. Vizer. Determined the value of resource costs in terms of the maximum possible return on production. If too much is produced in one direction, less can be produced in another, and this will be felt more strongly than the gain from overproduction. Satisfying needs with an increasing output of certain commodities and refusing an additional quantity of other commodities, one has to pay for the choice made a correspondingly increasing price, expressed in terms of these non-produced commodities. This is the meaning of the opportunity cost, known as Wieser's law.

Nobel laureate in the field modern economy V.V. Leontiev proposed an interpretation of Wieser's law in terms of the relative economic efficiency allocation of limited resources. It is embodied in his scientific and practical idea, which is the basis economic model input-output. Leontiev notes that the size and distribution of any mass of products, which seems to be the most effective for achieving a given economic goal, may turn out to be completely insufficient from the point of view of another goal.

The question of the economic goal, of what, how and for whom to produce, acquires practical meaning in terms of the rights and responsibility for choosing one or another alternative, which determined the proportions and directions for the distribution of limited resources. The right to choose a priority among alternatives is at the same time the obligation to compensate for the opportunity costs, to pay that increasing price for the diversion of resources to some priorities and the rejection of others.

The concept of opportunity costs has become firmly established in scientific circulation. It is used in such training courses like microeconomics, management accounting, and also in guidelines when determining the opportunity cost of property: "Property invested in the project for the purpose of permanent use, but created before the start of its implementation, is recommended to be taken into account in the calculation cash flows at the opportunity cost."

Opportunity cost theory can help make more effective solutions in the field of economic policy and give the key to predicting the situation in individual markets. The development of alternative economic thinking of buyers, sellers, managers, politicians is very important in modern economic conditions.

However, despite some attention to the theory of scientists and practitioners, there is a gap between the theory of opportunity costs and the immediate needs of economic decision makers. The author in the article tries to reduce this gap. In particular, two main problems stand out in the application of the theory - the measurement of opportunity costs and alternative estimates under conditions imperfect market.

1. Choice: freedom and restrictions

An alternative approach is based on the awareness of the fact of limited financial, human, material and other resources, as well as the associated limited freedom of choice. As you know, all benefits are divided into reproducible, non-reproducible and limitedly reproducible. The cost of lost opportunities in relation to reproducible and limitedly reproducible resources (in a more or less long term, sufficient for the emergence of new resources) will be less than in relation to non-reproducible resources. In the case of such a fixed resource as time, its use in one direction means a 100% loss of the possibility of its use in another way.

One of the restrictions on the freedom of an economic entity in choosing alternatives is its budget. We can say that the set of alternatives is dependent on the budget constraint; as this constraint changes, the number of alternatives changes. In addition, for any subject, in any project, one can single out a non-alternative (within its limits, expenses are predetermined, rigidly set) and an alternative (within which it is possible to choose directions for spending funds) parts of the budget. Regardless of what choice a person makes after graduating from a comprehensive school (continuation of education at a university or work), he will spend money on paying for housing, buying food, clothes. This non-alternative part of the costs is not included in the cost of lost opportunities.

The freedom and choice of an economic entity can expand or contract depending on changes in its budget constraint. Thus, softening the budget constraint of an enterprise through a loan, issuing shares allows it to increase the use of material and human resources in some areas (not at the expense of reducing costs in other areas), completely or partially avoiding the costs of lost opportunities.

2. Challenges in measuring opportunity costs

Much has been said about the difficulties of estimating these costs. The author of one of the publications on health economics notes that modern accounting is not aimed at measuring the opportunity costs in medicine, in particular, because of the obstacles to establishing a cost-benefit ratio for each patient.

In some cases, opportunity costs are determined without any problems:

• - when calculating according to the "work-leisure" model. In monetary terms, an alternative estimate of leisure time for working adults is given. This is the hourly rate of pay that they could receive in a paid job;
• - when evaluating various areas of employment. For example, choosing a job as a doctor in public institution with a monthly salary of UAH 1,500, a specialist loses the opportunity to engage in private practice with a monthly income of UAH 4,000;
• - when assessing internal costs in management accounting. For example, it is possible to evaluate lost wages by the owner of the enterprise and at the same time by its manager; assessment of uncollected rent by the owner of the building, who uses it for his business;
• - when assessing lost opportunities due to keeping money "under the pillow";
• - when comparing different investment projects, when both costs and benefits are expressed in monetary terms. For example, a person decides whether he should invest in his higher education or not. Opportunity costs are defined here in terms of explicit and implicit losses associated with higher education;
• - when calculating and evaluating using indifference curves. Movement along the indifference curve, as is known, shows what alternative price economic agents give to the rejection of one good (the quality of the good) in favor of another good (the quality). In other words, the propensity of an economic entity to sacrifice one good for the benefit of another, the marginal rate of substitution of one good for another, the degree of importance of one good in relation to another are quantified;
• - when assessing using isoquants. The latter show the level of interchangeability of production resources at release a certain amount products.

In some cases, the costs of lost opportunities can be more or less accurately determined only in kind. In the neoclassical concept of the cost of lost opportunities in the field of consumption and demand, the subject sacrifices one utility for the sake of another. The cost of buying and using a certain amount of good A is the impossibility of acquiring and using a certain amount of good B. In other words, the price of good A is expressed in good B. For example, if in order to obtain three units of good A, the subject must sacrifice nine units of good B, then the price of A B will be equal to three.

Speaking about the in-kind measurement of the costs of lost opportunities, it is necessary to pay attention to the following typical example. There are 2 goods: A (guns) and B (oil), and only one factor of production X. This factor can create a unit of good A and 4 units of good B. Therefore, in order to produce a unit of good A, four units of good B must be sacrificed, then is in terms of the alternative price A = 4B, or B = A/4. If prices are equated to opportunity costs, then we get P a P b \u003d 4, where P A is the price of a unit of the good BUT, a R B - the price of a unit of good B. Thus, the lost opportunities here, too, are reduced to physical terms, to the loss of utility for society. Since utility is difficult to commensurate, the assessment of lost opportunities in this case is also subjective, based on ethical and other non-economic considerations.

In many cases, opportunity costs are not measurable at all or are estimated very roughly due to the need to take into account the huge number of losses and gains as a result of choosing one or another option of behavior. We present some of these cases. Choosing one strategy of functioning and development, the enterprise loses the opportunity to develop in another direction; the country chooses one direction of socio-economic development, while sacrificing another. In both cases, the alternatives available to the enterprise and the state are very difficult to compare due to their heterogeneity and the impossibility of reducing to a common denominator. It is even more difficult to make a cost, monetary assessment of alternatives when it is necessary to take into account the impact of one or another alternative decision on social welfare.

In the practical application of the concept of opportunity cost, an imputation procedure is used. The concept of "imputation", or attribution (imputation), was one of the first to use the Austrian scientists K. Menger and F. Wieser. It means the procedure for linking certain actions of an economic entity with the benefits that it could receive if it took other actions. To implement the imputation procedure, it is necessary to bring costs and benefits to a comparable form. If the benefit is fixed in the form of some goal, then only costs are compared. For example, you can get to work by trolleybus or fixed-route taxi. In this case, when evaluating alternatives, the time and cost of travel to work are compared. In other cases, with cost stability (certain budgetary constraints), benefits and results are compared.

In general theoretical terms, an alternative approach to the analysis of economic processes and phenomena involves the placement of alternatives according to the degree of their attractiveness: efficiency, profitability, quality of results, etc. In practice, the task of assessing economic opportunity costs is to reduce all costs and lost benefits to money and time, then there is something that can be measured. And the imputation procedure without any complications is carried out when the basis for comparison is money or time. For example, to measure the opportunity value of the time of people of working age, the imputation of the time of paid work to leisure is used; or the imputation of the salary that a manager could receive, working for hire, working in his enterprise.

At the same time, imputation procedures will differ with respect to different resources, depending on whether they are used on this moment or not. It is impossible to impute the time of inactivity of the unemployed person to the salary that he could receive in a paid job.

It should be noted that when comparing alternatives, in some cases, incremental cost-benefit ratios should be used instead of averages (additional costs are compared with additional benefits). In medicine, one type of intervention must be compared not only with other types of intervention, but also with non-intervention.

Difficulties arise when using the imputation procedure. The main obstacle lies in the fact that it is far from always possible to reduce to a common denominator all the losses incurred by the subject when making this or that decision.

It is believed that opportunity costs may be those arising from not using the best of the available opportunities. But what may be lost is not the optimal, best opportunity, but, say, the so-called second best ( next best), the third one, and so on. best option, we lose the opportunities associated with the use of suboptimal options. In each particular case, it is appropriate to ask the question: should the cost of lost opportunities include one unused alternative, some of them, or all of them?

Another problem with assessing lost opportunities is its subjective nature. Subjective in some cases are the ranking of alternatives according to the degree of their attractiveness; the choice of costs and benefits (effects), which are taken into account when comparing various options for economic actions, the use of resources.

The processes concerning alternative estimates, as a rule, affect the interests of different economic actors. An increase in the opportunity price of a resource is beneficial for its sellers and disadvantageous for its buyers. The use of a resource in one direction and non-use in another may meet the interests of one group (person) and not meet the interests of another group (person).

In addition, the decision to choose from several alternatives is in some cases taken by a group of people (in economic policy, in an enterprise). Therefore, the problem arises of assessing the costs of lost opportunities for this group and for each of its members individually. The owner of a large stake in an enterprise can block an alternative that, according to him, entails high opportunity costs for the enterprise as a whole, for all shareholders, but in fact only for him. In the future, the subjective nature of the costs of lost opportunities may become the subject of joint research by representatives of the economic, psychological, and sociological sciences.

Considering the above and recognizing the difficulty of assessing alternative costs, we can propose an algorithm for estimating the opportunity costs of one of the key economic entities - the enterprise: 1) determining the non-alternative part of the enterprise's costs (administrative and management insurance payments etc.) and alternative (part of the cost of labor, purchase of materials, etc.); 2) promotion of alternatives within the alternative part of the costs; 3) comparison of the discounted flows of "expenses-incomes" for each alternative, placing them according to the level of profitability, the effect obtained, etc.; 4) the implementation of the imputation operation and the assessment of losses when choosing a non-optimal alternative.

For example, the budget for the alternative part of the costs for 5 years is UAH 50 million, which can be spent on the technical re-equipment of one of the workshops, measures to stimulate and retrain employees, advertising and other sales promotion measures. After evaluating the discounted flows of "expenses - incomes" for each direction in a time period of 5 years, it turns out that the technical re-equipment will bring 10 million hryvnias. profits, measures to stimulate and retrain employees - UAH 3 million, and sales promotion measures - UAH 5 million. The imputation of the best alternative - technical re-equipment - to the other two allows us to conclude that the choice of measures to stimulate sales means a loss of 5 million hryvnias, and measures to stimulate and retrain employees - 7 million hryvnias.

3. Alternative valuations in an imperfect market

Market imperfections make alternative valuation of resources difficult. In a perfect market, land, labor and other resources are placed at the disposal of the economic entity that finds the most profitable use for them at the moment and therefore offers the highest price for such a resource. In other words, the value of a resource in a perfect market is indeed determined by its use in the best alternative direction. So, on the market of urban land in Ukraine, which is more or less close to the perfect model, it is no coincidence that this resource has recently been used for the construction of expensive housing and business real estate.

In reality, on the way of a subject capable of ensuring the most efficient use of a resource, there may be various obstacles:

• - erected by the restrictive policy of monopolies, oligopolistic structures, the state;
• -- associated with the lack of information on the availability of such a resource from the most effective potential user;
• -- due to restrictions on the mobility of the resource.

Thus, Employer A can provide the best use and pay a higher salary to a specialist employed by Employer B. However, Employer A is located in another city, employment with him is accompanied by serious moral and psychological costs. Therefore, the specialist remains to work for employer B. Thus, in an imperfect market, the resource can get to a not the most efficient user and receive not the highest (of the possible) rating.

There are the following resource markets: more or less close to the perfect model and imperfect. In addition, there are sectors of the economy where the market does not function at all. At the same time, in the same sector of the economy, both those resources for which the market exists and those for which it does not exist can be used. In medicine, the latter include the time of the patient waiting in line, the time of informal patient care. It should also be noted that in different markets, some one market imperfection stands out "in relief".

It cannot be said that the more perfect the market, the more real the actual prices reflect the opportunity costs, and the actual valuation tends to be more towards the alternative one. It's just that for each good market there is its own alternative price.

Over time, there may be changes in the nature and magnitude of market imperfections. A monopolistic market can become an oligopoly, an oligopoly can approach the model of perfect competition. In place of the state monopoly, a quasi-market can be created. With a change in access to different alternatives, the costs of lost opportunities for economic entities change accordingly. With the reduction of market imperfections, economic agents have new alternatives.

For an effective alternative assessment of a resource, product, service, their market can be created, some market imperfections can be eliminated, and reduced. Thus, a quasi-market can be created at the place of state supply of services.

Speaking about the impact of market imperfections on the alternative assessment of a resource, a product, such an assessment should be singled out in different situations: a) during the initial assessment of alternatives for using the resource; b) when there is a problem of diverting already occupied resources from alternative uses. In the second case, the alternative assessment must take into account the costs of overcoming the obstacles associated with the transition from one alternative of using the resource to another. The value of these costs affects the inclusion of one or another alternative in the list of feasible and economically viable alternatives, the value of opportunity costs and price. The magnitude of the cost of transferring a resource from one application to another indicates the degree of market perfection: markets for more flexible, mobile resources are more perfect.

In perfect markets, the establishment of an opportunity price based on opportunity costs occurs automatically, without the participation of external forces. If the market does not function or functions poorly, various institutions are included in the assessment of the resource of the finished product. As a result, it turns out that not the most advanced technologies, samples of goods, services win; vacancies are occupied by not the most deserving workers. In cases where alternative valuation of resources is not possible or complicated, resources are valued at actual prices.

The microeconomic category of opportunity costs can be used in making macroeconomic decisions. The problem of choice at the macro level has long attracted the attention of researchers. Practically in all teaching aids curve is described production possibilities. When the economy is at one point on this curve, producing, for example, guns and butter, the opportunity cost of producing more guns is to underproduce a certain amount of butter.

The opportunity costs of decision-making at the macro level are based on the limited resources, primarily the state budget. Let's take as an example such an action as funding unemployment benefits. Having spent money on this action, society to a certain extent is deprived of the opportunity: 1) to subsidize enterprises that could create new jobs that could partially or completely "absorb" the unemployed; 2) provide enterprises with new orders, and therefore - and the opportunity to create additional jobs.

Opportunity cost of investment economic growth in short term is some limitation social programs. Intensive budget support Agriculture accompanied by a lost opportunity to equally intensively finance the coal industry.

It should be noted that the distribution of centralized financial resources by industries, sectors of the economy is associated with the distribution of skilled labor, fuel and energy and other limited resources. Therefore, the redistribution of centralized budgetary funds is always accompanied by the non-receipt of these limited resources by some sectors, sectors of the economy. For example, when deciding to increase the army from 200,000 to 300,000 people, society loses not only monetary and material resources that could be used for civilian purposes, but also the opportunity to use 100,000 people in a different way. productive population.

It should be noted that the reversibility (irreversibility) of macroeconomic decisions is important for making a decision on the choice of one or another direction of the country's socio-economic development, one or another project financially supported by the state. In the implementation of certain actions, the state, and with it the whole society, bears irreversible costs (sunk costs); that is, it is no longer possible to obtain any additional benefit from the money, material and human resources spent on holding the action.

In other cases, macroeconomic decisions are fully or partially reversible: 1) resources used in development in one direction are then redirected without much difficulty for use in another; 2) implementation of some community projects accompanied by positive externalities felt by the implementers of other government projects.

Choices in macroeconomics are limited. First, each state has social obligations to the population; secondly, there are obligations to support certain sectors of the economy. Without investing a certain minimum in the development of education, health care, fundamental science, we in many ways lose them forever, or in the future, significant funds and time may be required to restore them.

Thus, there is a certain non-alternative minimum within which the use of resources cannot be an object of choice, and therefore talking about lost opportunities is inappropriate here.

It should be noted that there is a different degree of urgency in spending funds by the state. Certain areas of spending funds are set strictly (subsidies for housing and communal services, pensions), and under no circumstances can they be an object of choice. Other obligations are not so rigidly fixed, their implementation happens to be neglected. Decisions about the degree of urgency of public spending are largely political.

It should also be taken into account that in macroeconomics the choice is limited by the dependence on the previous development of the country and its institutions. Having taken one step in economic policy, the state in a number of cases partially or completely loses the opportunity to take the second.

In historical terms, the socio-economic development of the country is a chain of successive elections at certain critical time points. The movement of the state from one turning point (node ​​of alternatives) to another is accompanied by a series of lost opportunities. The loss of one of the opportunities at some turning point can be fatal for the country. Getting back to the starting point and making other choices can be costly and time consuming. For Ukraine and other post-Soviet states, we are talking about the fundamental changes in socio-economic life that occurred as a result of the revolutions of 1917, and the subsequent return of countries to the optimal path of development in the 90s of the XX century.

If a course is set for market economy, globalization, turning the other way can be very costly. Choosing the wrong path for the development of a country, region, industry, state institute entails losses in GNP, output, production effect, social conflicts and upheavals.

But even within the framework of the country's market orientation, its course towards an open economy, the problem of choice and lost opportunities arises. Globalization should be based, in particular, on the relative advantages of the country. It can focus on existing relative advantages (cheap labor, low prices to metal, coal) or change your competitive advantages and enter sectors of the economy where non-price competition prevails.