The concept of opportunity costs. The concept of opportunity costs of production Basic concepts and the role of the theory of opportunity costs

11.02.2021

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.

opportunity cost- is the income lost by the economic agent as a result of his decision (although it could be otherwise). The opportunity cost of a good or service is the cost of the goods or services that had to be given up in order to be able to purchase the good.

Law of Increasing Opportunity Cost

The Law of Increasing Opportunity Cost states that in a full-employment economy, as the production of one good per unit increases, more and more of the other good must be sacrificed. In other words, the production of each additional unit of good Y is associated for society with the loss of an increasing amount of good X.

The operation of the law of increasing opportunity costs is explained by the specifics of the resources used. In the production of alternative goods, both universal and specialized resources are used. They vary in quality and are not completely interchangeable. A rationally acting economic subject will first involve in production the most suitable, and therefore the most efficient resources, and only after their depletion - the less suitable ones. Therefore, in the production of an additional unit of one good, universal resources are initially used, and then specific, less efficient resources are involved in production, which can only be partially used.

In addition, in the production of alternative goods, the consumption rates of the same materials differ significantly. In conditions of scarcity and lack of fungibility of resources, opportunity costs will increase as the production of an alternative good expands. If any unit of resources were equally suitable for the production of alternative goods, then the curve production possibilities would be a straight line.

Synonyms

opportunity cost

Was the page helpful?

More found about opportunity cost

Economic profit of the enterprise From the point of view of economists, the company's expenses are not limited to explicit costs, but also include opportunity costs Economic profit, calculated taking into account opportunity costs, is an indicator that allows you to better assess the quality
Risk premium cancels depreciation and multiplies prices It occurs when included in costs financial institutions not only explicit costs in full, but also opportunity costs based on relatively overestimated risks and missed opportunities on short planning horizons Opportunity costs in the form of risk premiums are not simply taken into account in pricing and tariffs
Cost of Capital: Views and Problems of Interpretation alternative costs In accordance with the accounting approach, the cost of capital appears as a certain interest rate reflecting
Costs of production of construction products as objects of economic analysis Thus, we are talking about opportunity costs associated with the use of resources that are property construction company From the foregoing, it is clear that significant
Methodological approaches to determining the required rate of return on capital investments Return RRR
Opportunity cost Synonyms Opportunity cost Page was helpful
Approaches to assessing the investment attractiveness of an organization: a comparative analysis Many approaches to assessment can be divided into the following groups: the market approach is based on the assessment of external factors - the market value of the company's shares and the amount of dividends paid accounting and financial approaches assessment internal factors including the financial condition of the organization, the combined approach is based on the assessment of both internal and external factors; the strategic approach is focused on the future achievements of the company; attention is focused on the investment qualities of the company; on the uncertainty of future opportunities and future results; the main corrective factor in the analysis of the dynamics of indicators All
Improving the efficiency of production cost management based on process improvement Therefore, the economic entity has opportunity costs Therefore, when setting the size of the delivery lot material resources volume must be taken into account financial resources
The total costs of the enterprise Since all costs are alternative then total costs consist of cash and opportunity costs Synonyms General
Determining the optimal capital structure: from trade-off theories to the APV model
In search of the optimal capital structure of the company The concept of trade-off theories is used by various researchers to describe a whole area of related theories in which the company's management evaluates the costs and benefits of alternative capital structure options. It is assumed that the management decision will be made in the case when marginal costs
Justification of financial decisions in the management of the capital structure of small organizations IT NOPAT ROIC EVA reflects the factors of creating the value of the organization actual and opportunity implicit costs Investor can compare investments in other projects and return on investment
Cost management of the enterprise The choice of certain resources for the production of any product means the impossibility of producing some alternative good The economic or opportunity cost of any resource chosen for use in manufacturing process equal
Methodology for managing the financial results of an enterprise Implicit costs arise due to lost opportunities to implement another alternative solution In other words, accounting profit exceeds economic
Costs of an enterprise Economic costs are the cost of other benefits of goods and services that could be obtained with the most profitable possible alternative use of these resources Economic costs include the actual costs of the enterprise wages of workers
Cost accounting and product costing in accordance with RAS and IFRS on the example of JSC AvtoVAZ Despite the fact that the concept of costs is not fixed in any of the legal documents, it is actively used in economic terminology as a designation of the valuation of all costs incurred by the organization, taking into account lost opportunities when choosing alternative option for spending available resources E A Tonchu Production costs are the total
Methodology for increasing the efficiency of holding management It should be sufficient to assess the effectiveness of the development option for enterprises in the region without a project b to adequately take into account the impact of the project on the technical and economic indicators of the enterprise, i.e. to form alternative variant with the project and calculation of its effectiveness In particular, the initial information should contain information ... In particular, the initial information should contain information about the balance sheets for the last reporting periods on sales volumes and operating costs, the volume of capital investments planned for implementation at their own expense, regardless of the implementation of the project
Using the methods of strategic analysis of the production costs of the enterprise In this case, only those types of production costs are taken into account, the value of which undergoes a change in the transition from one alternative variant to another Such production costs are the main ones and only their value is taken into account when ... The concept of transaction costs was introduced by the American economist Coase P Transaction costs are transaction costs in excess of the main costs
Syndicated loan as a tool for raising debt capital by Russian companies When organizing a syndicated loan, it is necessary to take into account transaction costs that have a great impact on the effective interest rate. With alternative instruments is 1 billion rubles. It is also necessary to take into account that in order to service such a debt load
On the question of the role and significance of economic profit in the reproduction process of agricultural organizations The concept of economic costs reflects the limited economic resources and the possibility of their alternative use and therefore reduces to the cost of factors of production at their best use To implement ... The economic costs of production should include payments for land tax part of the rent without tax costs for

Introduction

Opportunity cost, opportunity cost or opportunity cost (eng. Opportunity cost(s)) economic term, denoting the lost profit (in the particular case, profit, income) as a result of choosing one of the alternative options for using resources and, thereby, refusing other possibilities. The amount of lost profit is determined by the utility of the most valuable of the discarded alternatives. Opportunity costs are an inseparable part of any decision making.

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

If there are two investment options, A and B, and the options are mutually exclusive, then when assessing the profitability of option A, it is necessary to take into account the lost income from not accepting option B as the cost of a missed opportunity, and vice versa.

1. Alternative "explicit" and "implicit" costs

Most of the cost of production is the use of production resources. If the latter are used in one place, then they cannot be used in another, since they have such properties as rarity and limitedness. For example, the money spent on the purchase of a blast furnace for the production of pig iron cannot be simultaneously spent on the production of ice cream. As a result, by using some resource in a certain way, we lose the ability to use this resource in some other way.

By virtue of this circumstance, any decision to produce something necessitates the refusal to use the same resources for the production of some other types of products. Thus, costs are opportunity costs.

Opportunity cost is the cost of producing a good valued in terms of the lost opportunity to use the same resources for other purposes.

To see how the opportunity cost can be estimated, let's take Robinson on a desert island as an example. Suppose that near his hut he grows two crops: potatoes and corn. The land plot is limited: on the one hand - the ocean, on the other - the jungle, on the third - rocks, on the fourth - Robinson's hut. Robinson decides to increase corn production. And he can do this in only one way: to increase the area allocated for corn by reducing the area occupied by potatoes. The opportunity cost of producing each subsequent cob of corn in this case can be expressed in terms of potato tubers that Robinson did not receive by using the potato land resource to grow corn.

But this example is for two products. But what if there are dozens, hundreds, thousands of them? Then money comes to the rescue, by means of which all other goods are commensurate.

Opportunity costs can act as the difference between the profit that could be obtained with the most profitable of all alternative ways of using resources, and the profit actually received.

But not all entrepreneurial costs act as opportunity costs. In any way of using resources, the costs that the manufacturer bears in an unconditional manner (for example, registration of an enterprise, rent, etc.) are not alternative. These non-opportunity costs do not participate in the process of economic choice.

In economics, opportunity costs do not always take the form of cash costs.

For example, an ice cream manufacturer decided to take a break and bought trips to the Canary Islands. The expenses that he made out of his own pocket act as opportunity costs: after all, for this amount he (the manufacturer) could expand the production of ice cream (buy or rent premises, purchase additional raw materials or equipment) if this production will bring profit. However, while vacationing in the Canary Islands, he does not receive the income from the expansion of production, which he could have received if he had not left and did not use this resource differently. Lost or not received income is also included in the opportunity cost, although it is not a direct monetary expense (this is not what he spent out of his own pocket, but what he did not receive in his own pocket).

Thus, the opportunity cost in the economy is the sum of opportunity cash costs and lost cash income.

Opportunity costs faced by firms include payments to workers, investors, and owners of natural resources. All these payments are made in order to attract factors of production, diverting them from alternative uses.

From an economic point of view, opportunity costs can be divided into two groups: "explicit" and "implicit".

Explicit costs are opportunity costs that take the form of cash payments to suppliers of factors of production and intermediate products.

Explicit costs include: wages of workers (cash payment to workers as suppliers of the factor of production - labor); cash costs for the purchase or payment for the lease of machine tools, machinery, equipment, buildings, structures (monetary payment to suppliers of capital); payment of transport costs; utility bills (electricity, gas, water); payment for services of banks, insurance companies; payment of suppliers of material resources (raw materials, semi-finished products, components).

Implicit costs are the opportunity costs of using resources owned by the firm itself, i.e. unpaid expenses.

Implicit costs can be represented as:

1. Cash payments that the firm could receive with a more profitable use of its resources. This can also include lost profits (“opportunity costs”); the wages that an entrepreneur could have earned by working elsewhere; interest on capital invested in securities; land rents.

2. Normal profit as the minimum remuneration to the entrepreneur, keeping him in the chosen branch of activity.

For example, an entrepreneur engaged in the production of fountain pens considers it sufficient for himself to receive a normal profit of 15% of the invested capital. And if the production of fountain pens gives the entrepreneur less than a normal profit, he will transfer his capital to industries that give at least a normal profit.

3. For the owner of capital, implicit costs are the profit that he could receive by investing his capital not in this, but in some other business (enterprise). For the peasant - the owner of the land - such implicit costs will be the rent that he could receive by renting out his land. For an entrepreneur (including a person engaged in ordinary labor activity) as implicit costs will be the wages that he could receive (for the same time), working for hire at any firm or enterprise.

Thus, Western economic theory includes the income of the entrepreneur (in Marx it was called the average return on invested capital) in the cost of production. At the same time, such income is considered as a payment for risk, which rewards the entrepreneur and encourages him to keep his financial assets within this enterprise and not divert them for other purposes.

2. Accounting for opportunity costs in small business

The formation of the composition of production costs and their accounting are important for any organization, small businesses especially need such formation.

The costs are monetary value costs of production factors necessary for the enterprise to carry out its production and commercial activities. They find their expression in terms of the cost of production, which characterize in monetary terms all the material costs and labor costs that are necessary for the production and sale of products.
The quantity of a product that a firm can offer on the market depends, on the one hand, on the level of costs (costs) for its production and on the price at which the product will be sold on the market, on the other. From this it follows that knowledge of the costs of production and sale of goods is one of the most important conditions for the effective management of the enterprise.
In real production activities it is necessary to take into account not only the actual monetary costs, but also the opportunity costs.
The opportunity cost of any solution is the best of all possible solutions. The opportunity cost of using resources is the cost of using resources at the best of other possible alternative uses. The opportunity cost of the labor time that an entrepreneur spends running his business is the wages he gave up by not selling his labor to another company other than his own, or the cost of free time that the entrepreneur donated, whichever is greater. . Therefore, the expected income from the type of activity in a small business, on average for the year, should exceed the maximum possible alternative income of an entrepreneur in another type of activity.
Opportunity costs include things like paying wages workers, investors, payment of resources. All these payments are intended to attract these factors, thereby diverting them from their alternative use.
Explicit costs are opportunity costs that take the form of direct (cash) payments for factors of production. These are such as: payment of 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.
Considering that small businesses are mainly firms and organizations with a small initial capital, and the organizers of such firms are often middle-class people who do not have the opportunity to constantly compensate for the losses of their enterprise. It can be concluded that accounting for opportunity costs by small businesses is mandatory. Because only with the help of this accounting, a small business will be able to exist and bring a stable income to the owner. Also, at the initial stage of a small business, accounting for opportunity costs can help its owner determine the feasibility of further work in his chosen industry. This is especially important for small businesses, because small business owners do not have the opportunity to risk the money invested in the business.

In fact, accounting for opportunity costs in small business is a condition for its existence.

As already noted, revenue is income from the sale of products, and sub-costs are understood as the costs of the company for the production and sale of products. The difference between them is profit.

There are two interpretations of costs, which are called accounting and economic.

Accounting costs are the explicit costs associated with paying for resources that do not belong to the enterprise itself, and are taken into account when calculating its remaining profit. These include:

Depreciation of fixed assets:

Costs of raw materials, components, energy;

wages of workers and employees;

rent payments;

payment for services of third parties;

tax payments;

payment of interest on loans.

The difference between revenue and accounting costs forms accounting (net economic) profit. The term "accounting" means accounting costs and should not be interpreted as costs calculated according to the rules accounting. Accounting costs are sometimes called external (explicit cost), as they express the cost of resources that are owned by others.

For a comparative assessment of different investment options, in addition to accounting (explicit) costs, it is also necessary to take into account implicit costs - the costs of lost profits. Suppose that an entrepreneur who has invested in the business a capital of 100 monetary units, completely consumed during the year, has produced and sold products for 110 monetary units by the end of this year, while receiving 10 units of accounting profit. The return on his capital was 10%. Was the business development option he chose economically justified if the annual interest rate paid by the bank on deposits was 15%? Obviously not. The chosen investment option brought him a loss of 5 monetary units compared to a bank deposit. This example shows that the cost of lost profits, equal in magnitude to the income from the best of the other business development options, should be considered as implicit costs. They can be called internal (implicit cost), as they show the hidden cost of resources owned by the firm itself. As part of implicit costs, the rate of return (hidden interest on equity) and the rate of return (hidden wages of the entrepreneur himself) are distinguished.

Explicit (accounting) and implicit costs together form economic (opportunity) costs. They show the cost of all resources used by the firm - both own and borrowed. The difference between revenue and economic costs is economic profit, that is, the excess of accounting profit over the return on the best of the alternative capital investments. The fact that an enterprise receives zero economic profit does not mean that its activities are devoid of economic sense. This only indicates that its return is equal to the return on the use of capital in other options for its use.

Costs include costs associated with sunk costs - long-term investments in assets that do not have an alternative application. It is not possible to stop these costs, so they are also called sunk costs. Imagine that an entrepreneur has acquired highly specialized equipment for the production of products that have not found demand. He will not be able to use it for other purposes, it will also be difficult to sell it. Therefore, in anticipation of the emergence of demand for products, such equipment will be stored, subject to physical and moral wear and tear (amortizing). This depreciation is an example of a sunk cost.

Conclusion

Opportunity cost is an economic term that refers to the loss of profit (profit) as a result of choosing one of the alternative options for using resources. The opportunity cost is the opportunity cost.

A simple example is given by the well-known anecdote about a tailor who dreamed of becoming a 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 lost profits when ascending the throne. If you remain a tailor, then the income from the royal office will be lost, which will be the opportunity cost of this choice.

Bibliography

1. Economy. Textbook / Edited by A. I. Arkhipov, A. N. Nesterenko, A. K.

Bolshakov. M .: "Prospect", 2005

Humanitarian Publishing Center VLADOS, 2006

3. Fisher S., Dornbusch R., Schmalenzi R. Economics: Translation from English from the 2nd

editions. - M.: Delo, 2006

4. Makkonel KR, Brew SL Economics: Principles, problems and politics. In 2 tons.

5. Modern economy. Public training course. Rostov-on-Don.

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, talk 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 implementation of this decision, are not taken into account as alternative ones.

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.

Send your good work in the knowledge base is simple. Use the form below

Students, graduate students, young scientists who use the knowledge base in their studies and work will be very grateful to you.

Posted on http://allbest.ru

Course work

Opportunity cost model

Introduction

1. general characteristics opportunity cost

1.1 Opportunity cost concept

1.2 Types of opportunity costs

2. Contemporary Issues economic choice and solution methods

2.1 Opportunity cost method in economic choice

2.2 Economic systems

3.1 Opportunity costs in solving economic choice problems

3.2 The concept of "efficiency" in economic choice

Conclusion

Bibliography

Introduction

A large number of economic goals with limited resources poses the problem of economic choice - the choice of the best of the various options for their use, which achieves the maximum satisfaction of needs at a given cost.

Before every person, firm and society as a whole, there are problems of what, how and for whom to produce, that is, how to determine the conditions and directions for the use of limited resources. The goal of the rational behavior of a business entity is to achieve maximum results with given resource costs or to minimize costs while achieving the intended goal. Such a premise is rather unrealistic, since the existing statistics are too inaccurate, the methods of analysis are rather crude, and information on the actual activities of economic entities is very limited. Nevertheless, optimization theory serves as a kind of guide to rational activity. In economic theory, it is assumed that each economic entity seeks to maximize: the consumer - the satisfaction of their needs, the firm - profits, the trade union - the income of its members, the state - the level of people's welfare or, according to the theory of public choice, the prestige of politicians.

In reality, people always face opportunity costs. The production of one product means the rejection of another. A rational person must calculate not only future costs, but also the costs of unused production opportunities in order to make an optimal economic choice.

Based on the foregoing, the purpose term paper is the study of the opportunity cost model and other methods of solving the problem of economic choice. The tasks of the work are to consider the problem of economic choice, give examples, suggest ways to solve it.

The theoretical basis of this course work is represented by textbooks, teaching aids, Internet resources.

1. General characteristics of opportunity costs

1.1 Opportunity cost concept

The concept of opportunity cost was closely approached in 1817 by David Riccardo with his principle of comparative advantage, since comparative advantage means that the opportunity cost (expressed in terms of another good) is lower. The theory of comparative costs was put on the basis of the theory of opportunity costs in 1936 by the Austrian-born American economist Gottfried Haberler.

The main contribution to the development of the concept of opportunity cost was made by the Austrian School of Economic Thought. Its most prominent representative Friedrich von Wieser in 1884 develops the principle of imputation - imputation, attribution of the price or utility of one product to another product, if these products are economically interconnected (impute - to attribute, impute, explain). The concept of opportunity costs itself is introduced later in 1894, but in fact this is the concept of Wieser.

The costs of one good, expressed in another good, which had to be neglected (donated), are called opportunity costs (opportunity costs), costs of unused opportunities or imputed costs.

A modern definition of opportunity cost.

Opportunity cost is the value that could be obtained from an alternative action that had to be abandoned.

Opportunity costs are those costs of producing good "A", which are determined by the utility of good "B", which could be produced with the same resources as good "A".

The methodological significance of the concept of opportunity costs lies in the proof of three conclusions:

Costs are just as valuation-based as utility. There are no objective costs. This is contrary to common sense, but it is true;

Costs are determined by the prices of alternative opportunities, prices do not depend on directly accounted (accounting) costs;

The cost of an action, the price, reflects the alternative possibilities that have to be given up for the sake of this action.

Concepts that are identical in content are opportunity cost, opportunity costs.

Opportunity costs - the most fundamental concept of modern economic theory, the basis of modern economic thinking.

1.2 Types of Opportunity Costs

Explicit and implicit opportunity costs.

Explicit costs are opportunity costs that take the form of direct (cash) payments for factors of production. These are such as: payment of 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 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.

External and internal costs.

Based on the concept of time costs, we can say that costs are those payments that an entrepreneur must make in order to divert the factors he needs from alternative uses. These payments can be both external and internal. Those payments that we pay to suppliers of labor services, raw materials, fuel, energy, transport services, etc., are called external costs. That is, they represent payments to suppliers that are not related to the owners of this firm. However, in addition, the firm may use its own resources belonging to itself. As we already know, the use of both own and non-own resources is associated with some costs. The costs associated with using your own resource are unpaid or internal costs.

For example, the owner of a company, paying rent, incurs internal costs, although he could rent this premises and receive monthly income. Working in his enterprise, using his capital, the owner sacrifices the interest and wages that he could have if he offered his services as a manager to any enterprise.

production costs in the short run.

The short-term period is a period of time too short for a change in production capacity, but sufficient for a change in the intensity of use of these capacities. Production capacities remain unchanged in the short run, and output can change by changing the amount of labor, raw materials, and other resources used at these facilities. The cost of production of any product depends not only on the prices of resources, but also on technology - on the amount of resources that is needed for production.

The long-term period is characterized by the fact that the enterprise, depending on the economic situation, can change its production resources to a significant extent. Therefore, in the short run production capacity organizations are a fixed resource, in the long run a changing resource.

Therefore, the division of costs into fixed and variable is correct only for a short period. In the long run, all factors of production are variable and, therefore, all costs are also variable.

Fixed, variable and total costs.

The criterion for dividing costs into fixed and variable is their dependence on the volume of production.

Fixed costs (FC) are costs that do not depend on the volume of production. They include rent and maintenance fees, depreciation, interest on loans, etc.

Variable costs (VC) are costs that are directly related to the volume of production. These costs include the cost of raw materials, materials, labor and other variable costs.

The sum of constants and variable costs is the gross (Fig. 1) or total costs (TC) of the firm (1):

TC = FC + VC (1)

As noted above, the division of costs into fixed and variable implies the conditional allocation of short-term and long-term periods in the activities of the firm.

Rice. 1 - Fixed, variable and gross costs of the firm

Average costs.

Average cost (AC) is the total cost per unit of output (2). Determined by dividing total costs output per unit of output.

Average fixed costs (AFC) are determined by dividing the total fixed costs(TFC) for the corresponding amount of products produced (Q) (3).

AFC = TFC / Q (3)

Since fixed costs, by definition, do not depend on the volume of products produced, the average fixed costs will also decrease with an increase in the volume of production.

Average variable costs (AVC) are determined by dividing the total variable costs (TVC) by the corresponding quantity of products produced Q (4).

AVC=TVC/Q(4)

AVC first falls, reaches its minimum, and then begins to rise. Such a slope of the curve is explained by the law of diminishing returns, i.e. up to one hundred and fiftieth unit, marginal cost falls, therefore, AVC will also fall, and then both TVC and AVC begin to increase.

Average total cost (ATC) (5) is calculated by dividing the total cost TC by the volume of output Q (Figure 2).

ATC = STC / Q = FC/Q+VC/Q = AFC + SAVC (5)

Rice. 2 - Curves of average and marginal costs of the enterprise

marginal cost.

Marginal cost is called the additional costs associated with an increase in output by 1 unit “or a change in total costs with a change in output (MC):

MC = DTC / DQ (6)

where DTS -- increase in gross costs; DQ -- increase in production volume.

For example, if with an increase in sales by 200 units of goods, the company's costs will increase by 1000 rubles, then the marginal cost will be 1000:200 = 5 rubles. This means that an additional unit of production costs the company an additional 5 rubles.

When analyzing marginal cost, the following points need to be kept in mind:

a) marginal cost does not depend on the fixed costs of the enterprise;

b) the marginal cost curve initially declines and becomes below the average total cost due to economies of scale in production; then marginal cost increases as the law of diminishing returns comes into play;

c) the marginal cost curve intersects the curves of average total and average variable costs at their minimum points.

Determining marginal cost allows a firm to manage its costs in order to achieve economic efficiency its functioning. Based on the calculation of marginal cost, the organization can determine what it will cost to expand production by an additional unit of output.

Private and public costs.

Costs can be viewed from the point of view of either an individual commodity producer or society as a whole. In some cases, both approaches have the same result, in others they are different. This is explained by the fact that not all the results of production have a commodity form, some of them are "realized" directly, bypassing the relationship of purchase and sale, and have a direct impact on the welfare of society. Thus, the social costs associated with the operation of a metallurgical plant will exceed private costs by the value of external costs for the plant itself, the costs of compensating for the socio-economic consequences of pollution environment, regardless of who they will be carried out. Only in the absence of external costs and effects do public and private costs coincide.

Knowledge of cost functions is very important for decision making both at the enterprise level and at the government level. Short-term cost functions are of key importance for determining prices and output volumes, while long-term cost functions are important for planning the development of enterprises and their investment policy.

Law of Increasing Opportunity Cost

Opportunity costs are the opportunity costs of using the factors of production that the entrepreneur already owns. They form part of the profit that an entrepreneur could receive in return for reimbursement of his own expenses.

Alternative (imputed) costs mean the lost profit of the enterprise, which it would have received if it had chosen to produce an alternative product, at an alternative price, in an alternative market, etc.

The management of enterprises is concerned about how to reduce costs and increase profitability. Therefore, it is interested in the opportunity costs associated with forgone opportunities to make the best use of the firm's resources and include, but is not limited to, the explicit costs incurred by the firm.

Salary and material costs are money that could be effectively spent elsewhere. Cash costs also include opportunity costs. Wages are the opportunity costs of labor resources acquired in a competitive market.

Imputed costs are the opportunity costs of using resources owned by the firm. They are not included in the firm's payments to other organizations or individuals. The self-employed worker is not employed by the factory and does not receive wages there.

According to the law of increasing opportunity cost, the production of additional units of one product entails sacrificing an increasing number of units of another product.

Due to the fact that resources do not have equal productivity in all possible processes of their use, the switching of resources from one sphere of their application to another causes the emergence of the law of increasing opportunity costs.

It should be emphasized the main thing: there is no unambiguous or generally accepted solution to the problem of economy. Different societies with different cultural and historical backgrounds, different customs and traditions, opposite ideological foundations (not to mention resources that differ both quantitatively and qualitatively) use different institutions to solve the real problem of the scarcity of resources.

For example, countries such as Russia, the United States, England, each try to achieve efficiency in the use of their resources, each in their own way, within the framework of their recognized goals, ideologies, levels of technology, endowments and cultural values.

Law of diminishing returns.

This law is based on the incomplete interchangeability of resources. After all, replacing one of them with another (others) is possible up to a certain limit. For example, if four resources: land, labor, entrepreneurial abilities, knowledge are left unchanged and such a resource as capital is increased (for example, the number of machines in a factory with a constant number of machine operators), then at a certain stage there comes a limit beyond which further growth specified production factor is getting smaller. The performance of a machine operator who maintains an increasing number of machines decreases, the percentage of scrap increases, machine downtime increases, etc.

The law of diminishing returns can also be interpreted in another way: the growth of each additional unit of production requires, from a certain point on, ever greater expenditures of the economic resource. After that, an increase in fertilizer costs does not give an increase in yield at all. In this interpretation, the law is called the law of increasing opportunity costs (increasing costs).

The opportunity cost is very hard to imagine. a certain amount of rubles or dollars. This is due to the fact that in a diversified production environment and a rapidly changing economic environment, it is difficult to choose The best way use of available resources. In a market economy, this is done by the entrepreneur himself as the organizer and initiator of production. Based on his intuition and experience, the entrepreneur determines the effect of a particular direction of the use of resources. At the same time, the revenue and the amount of income from missed opportunities is always hypothetical.

Thus, opportunity costs are the costs of issuing goods, determined by the cost of the best lost opportunity to use production resources, ensuring maximum profit.

According to the law of increasing opportunity cost, the production of additional units of one product entails sacrificing an increasing number of units of another product.

In accordance with the law of diminishing returns, a continuous increase in the use of one resource, combined with an unchanged amount of other resources, at a certain stage leads to the cessation of the growth of returns from it, and then to its reduction.

Based on the foregoing, it can be determined that opportunity costs are associated with lost profits and arise when making economic decisions.

2. Modern problems of economic choice and methods of solution

2.1 Opportunity cost method in economic choice

The main economic task is to choose the most efficient way of distributing factors of production in order to solve the problem of limited resources and limitless human desires. This problem is reflected in the formulation of three basic questions of economics.

1. What should be produced - i.e. what goods and in what quantity;

2. How the goods will be produced, i.e. by whom, with what resources and what technology they should be reproduced;

3. For whom the goods are intended, ie. who should consume goods and benefit from them.

Consider the content of each question.

The first major choice, which goods to produce, is easily illustrated by the example of a society producing only two goods, A and B. The factors of production used in one place cannot be used in another production at the same time. This means that the production of good A entails the loss of the ability to produce good B and has an opportunity cost.

The opportunity cost of a good or service is the cost measured in terms of the lost opportunity to engage in the best available alternative activity that requires the same time or the same resources.

Cash costs and opportunity cost are overlapping concepts. Some opportunity costs, such as tuition fees, take the form of cash costs, while others, such as leisure time costs, do not appear in cash. Some cash expenses, like the same tuition fees, represent opportunity costs, since could be used for other purposes. Other monetary costs, such as clothing, food, etc., always exist and are therefore not included in the opportunity cost.

Opportunity cost curve

In conditions of limited resources, it is impossible to increase the consumption of one good without reducing the consumption of another good. Suppose a society produces goods X and Y.

The output of additional units of good X can be adjusted by using a certain set of production factors. But due to limited resources, this number of factors will not be used to produce good Y. Everything that society could have received, but due to limited resources did not receive and missed this opportunity, is the cost of a missed opportunity. If three units of Y must be given up to produce X, then these three units not produced determine the opportunity cost of producing a unit of good X.

The value of lost opportunity costs (opportunity costs) is the cash proceeds from the most profitable of all alternative ways of using resources.

The scarcity of resources gives rise to a fundamental economic problem of choice: what goods and services a society should produce with a limited amount of land, labor, and capital.

A rational choice is a choice that is made on the basis of a comparison of the benefits and opportunity costs of any decision. At the same time, those actions are selected that are most economically beneficial - i.e. provide the greatest benefits compared to costs.

Marginal cost is the extra cost of putting in extra effort (or producing an extra unit of output, if that unit can be quantified).

Marginal benefit is the additional benefit from the extra effort (or profit from the sale of an additional unit of output).

A visual representation of the problem of limited resources and the need for choice is given by the production possibilities curve (Figure 3).

The curve can be used to demonstrate the problem of choice and the opportunity cost.

Using the curve, you can demonstrate the law of increasing opportunity costs.

The curve can be used to demonstrate full employment.

Using the curve, you can demonstrate the state of unemployment.

A curve can be used to demonstrate the inefficient use of resources.

The curve can be used to show economic growth.

Rice. 3 - Production Possibility Curve

The production possibilities curve shows that an increase in the production of one good is possible only at the expense of a simultaneous decrease in the production of another good. The content of the problem of choice lies in the fact that if the economic resource used to meet the needs of society is limited, then there is always the possibility of its alternative use. What society refuses is called imputed (hidden or alternative) costs of achieving the chosen result. Compare points C and D. By choosing point C, society will prefer to produce more good Y (Yc) and less good X (XC) than choosing point D and producing good Y - YD, and good X - XD. When moving from point C to point D, society will additionally receive a certain amount of good X (X = XD - Xc), sacrificing a certain amount of good Y (Y = YC - YD) of this share. The opportunity cost of any good is the amount of another good that must be sacrificed in order to obtain an additional unit of that good.

The production possibilities curve is concave from the origin, demonstrating that an increase in the production of one good is accompanied by an increasing decrease in the production of another good. Based on these observations, we can formulate the law of increasing opportunity cost: in a full-employment economy, as the production of one good per unit increases, more and more of the other good must be sacrificed. In other words, the production of each additional unit of good Y is associated for society with the loss of an increasing amount of good X. The operation of the law of increasing opportunity costs is explained by the specifics of the resources used. In the production of alternative goods, both universal and specialized resources are used. They vary in quality and are not completely interchangeable. A rationally operating economic entity will first involve in production the most suitable, and therefore the most efficient resources, and only after their depletion - less suitable ones.

Therefore, in the production of an additional unit of one good, universal resources are initially used, and then specific, less efficient resources are involved in production, which can only be partially used. In addition, in the production of alternative goods, the consumption rates of the same materials differ significantly. In conditions of scarcity and lack of fungibility of resources, opportunity costs will increase as the production of an alternative good expands. If any unit of input were equally suitable for the production of alternative goods, then the production possibilities curve would be a straight line.

The second major economic choice is how to produce. It is related to the existence of several ways of producing a good or service. Cars can be made, for example, in highly automated factories with a huge amount of capital equipment and a relatively small proportion of labor, but they can also be made in small enterprises that use more labor. A key consideration in deciding how to produce is allocative efficiency or Pareto efficiency.

Pareto efficiency is a level of organization of the economy at which society extracts the maximum utility from available resources and technologies, and it is no longer possible to increase one's share in the result without reducing the other.

When efficiency is achieved, more of the good can be produced at the cost of losing the ability to produce something else if the factors of production and knowledge are unchanged. However, the efficiency of production can be increased by improving the social division of labor. Its important characteristics are specialization and cooperation, allowing to take into account comparative advantages in the production of goods.

Comparative advantage is the ability to produce a good or service at a relatively lower opportunity cost. Let's illustrate the principle of comparative advantage with an example. Suppose two students work part-time in an office. Sergey can print a letter in 5 minutes, sign and seal an envelope in 1 minute. Andrei needs to spend 10 minutes on a letter and 5 minutes on an envelope. Working independently, they can make 14 letters an hour. Using the principle of comparative advantage, it is more efficient to organize the work so that Andrei, who has a lower opportunity cost in typing letters, does only this. Then Sergey glued and signed the letters prepared by Andrey, spending 6 minutes on this, and in the remaining time, prepare another 9 on his own. In this case, the total result of the work will be maximum and amount to 15 letters. The principle of comparative advantage has a fairly wide application. It can be used not only to organize production within an enterprise, but also in connection with the division of labor between firms or government agencies, as well as between countries. The third key issue of the economy is the distribution of the produced product among the members of society. It can be seen both in terms of efficiency and in terms of fairness.

Efficiency in distribution - a situation in which it is impossible, by redistributing the existing amount of goods, to satisfy the desire of one person more fully, without thereby damaging the satisfaction of the desires of another person.

Equity in distribution is interpreted in different ways. We single out two extreme concepts. According to the first, all income and wealth should be distributed equally. The alternative position is that justice does not depend on “leveling”, but on the operation of a distribution mechanism based on the right of private property and non-discrimination. At the same time, equality of opportunity is more important than equality of income. In a market economy, any product is distributed among consumers on the basis of their desire and ability to pay the existing price for it. Discussions about allocative efficiency are seen as part of positive economics, and equity as part of normative economics.

The questions of what, how and for whom to produce are basic and common for all types of farms, but they are different. economic systems solve them in their own way.

2.2 Economic systems

The economic system is a special mechanism created to solve the two-sided problems of rarity and output. Because economic resources are limited relative to society's needs for goods and services, certain ways are needed to allocate them between alternative uses.

An economic system is an ordered set of socio-economic and organizational relations between producers and consumers of goods and services.

Various criteria can underlie the selection of economic systems:

The economic state of society at a certain stage of development (Russia in the era of Peter I, Nazi Germany);

- stages of socio-economic development (socio-economic formations in Marxism);

- economic systems characterized by three groups of elements: spirit (main motives economic activity), structure and substance in the German historical school;

Types of organization associated with ways of coordinating the actions of economic entities in ordoliberalism;

A socio-economic system based on two features: the form of ownership of economic resources and the method of coordinating economic activity.

In modern scientific and educational literature, the classification according to the last of the selected criteria has become most widespread. Based on this, there are traditional, command, market and mixed economies.

The traditional economy is based on the dominance of traditions and customs in economic activity. Technical, scientific and social development in such countries is very limited, because it comes into conflict with the economic structure, religious and cultural values. This economic model was characteristic of the ancient and medieval society, but is preserved in modern underdeveloped states.

The command economy is due to the fact that most enterprises are in state property. They carry out their activities on the basis of state directives, all decisions on the production, distribution, exchange and consumption of material goods and services in society are made by the state. This includes the USSR, Albania, etc.

The market economy is defined by private ownership of resources, the use of a system of markets and prices to coordinate and manage economic activity. In a free market economy, the state does not play any role in the distribution of resources, all decisions are made by market entities on their own, at their own peril and risk. This is usually referred to as Hong Kong.

In today's real life there are no examples of a purely command or purely market economy, completely free from the state. Most countries strive to organically and flexibly combine market efficiency with state regulation of the economy. Such an association forms a mixed economy.

A mixed economy is an economic system where both the state and the private sector play an important role in the production, distribution, exchange and consumption of all resources and material goods in the country. At the same time, the regulatory role of the market is complemented by the mechanism state regulation, and private property coexists with public-state.

The mechanism for solving the main economic problems has its own characteristics, determined by the type of economic system that has established itself in a given society: market, administrative-command or mixed.

At the same time, in a market economy, all economic entities are guided in their activities by such market parameters as demand, supply, price, and competition. The mechanism of interaction between demand, supply and price is called the market mechanism. It coordinates activities between producers and consumers of goods and services.

Competition, on the other hand, determines the impossibility of influencing the price level by any of the many participants in the market process: an attempt to raise the price ends in the impossibility of selling goods, and an artificial price reduction brings losses.

It is the price that is the main instrument that regulates supply and demand in a competitive market (Fig. 4).

Rice. 4 - Scheme of operation of the competitive market mechanism

Demand is inversely related to price - when the price of a product rises, the demand for it, as a rule, falls, when the price falls, the demand for the product rises. At the same time, the demand of the population depends solely on retail prices for goods, and a change in wholesale prices affects the production demand of the company.

There is a direct relationship between price and supply: ceteris paribus, with an increase in price, the amount of supply also increases, and vice versa, a decrease in price entails a decrease in the volume of supply.

In addition, supply and demand influence each other directly. So, for example, the supply of new high-quality goods on the market always stimulates demand for them, and an increase in demand for certain types of goods necessitates an increase in the supply of these goods.

At present, Russia has an eclectic economic system, consisting of elements of an administrative-command system, market economy free competition and a modern market system. In the former Soviet Asian republics, elements of the traditional system are added to this conglomerate. Therefore, it is quite arbitrary to call the property relations and organizational forms existing in our country an economic system (even if it is eclectic). An important feature of the system is missing - its relative stability. After all, in domestic economic life everything is in motion, has a transitional character. This transition, apparently, stretches over decades, and from this point of view, the transition economy can also be called a system.

Transition economy - an economy that is in a state of change, transition from one state to another, both within one type of economy and from one type of economy to another, occupies a special place in the development of society.

From a transitional economy, one should distinguish a transitional period in the development of society, during which a change of one type takes place. economic relations another.

Today, there is a wide range of prospects for the transitional economies of the countries of the former "socialist camp": from degradation to a dependent and increasingly lagging economic system of developing countries to transformation into new industrial states; from economies that retain "socialist" attributes and are based on public ownership, such as China's, to right-liberal, private-ownership-based systems that began with the implementation of the principles of "shock therapy". At the same time, three fundamental trends intersect in the transition economy of each country.

The first of them is the gradual dying (both natural and artificial) of “mutant socialism”, which received its name in comparison not with a theoretical ideal, but with the real trend of socialization existing in world practice.

The second trend is connected with the genesis of the relations of the post-classical world capitalist economy (modern market economy based on private-corporate property).

The third trend is to strengthen the process of socialization - the growing role of public (group, national and international) values in economic development and the humanization of public life as a prerequisite for any modern transformations. Obviously, under such conditions, the final choice of the economic system in Russia will ultimately depend on the balance of political forces in the country, the nature of the ongoing transformations, the scale and effectiveness of the ongoing reforms in all spheres of public life, as well as society's adaptation to change.

Thus, the optimal choice can be considered such a solution to the problem, which provides the maximum result at a minimum cost. Only knowing the essence economic organization production, it will be safe to say that economic choice will take place only when the ratio of costs and benefits is taken into account.

From the foregoing, we can conclude that in order to obtain correct answers to the Main Questions of the Economy, it is necessary to know the possibilities of the Economic system, the state of the Market, the factors of formation of Demand and Supply.

3.1 Opportunity Costs in Solving Economic Choice Problems

The concept of opportunity cost is an effective tool in making effective economic decisions. The assessment of resource costs is carried out on the basis of comparison with the best of the competing, most effective method use of scarce resources. The centrally controlled system has deprived business entities of independence in making strategic decisions. And that means the possibility of choosing the best alternatives. The central authorities themselves, even with the help of computers, were unable to calculate the optimal structure of production for the country. They could not find answers to the two main questions of the economy "what to produce?" and "how to produce?". Therefore, under these conditions, the result of opportunity costs was often a shortage of goods and low-quality products.

For a market economy, choice and alternativeness are integral features. Resources must be used in an optimal way, then they will bring maximum profit. Saturation with the goods and services that consumers need is a persistent outcome of the opportunity cost of the market system.

Opportunity costs are sometimes difficult to imagine as a certain amount of rubles or dollars. In a widely and dynamically changing economic environment, it is difficult to choose the best way to use the available resource. In a market economy, this is done by the entrepreneur himself as the organizer of production. Based on his experience and intuition, he determines the effect of a particular direction of resource use. At the same time, income from lost opportunities (and hence the size of opportunity costs) are always hypothetical.

3.2 The concept of "efficiency" in economic choice

costs economic demand competition

A simultaneous increase in the output of all goods, and hence a breakthrough in the problems of choice, is possible only with economic growth, i.e. increase in economic potential.

The economic growth It is provided in two ways and, accordingly, has two forms:

Extensive type of economic growth (an increase in production is achieved by increasing the amount of resources used in the production process);

Intensive (growth in production is achieved by reducing the amount of resources used in the production process and, accordingly, is associated with a change in their quality).

The presence of unlimited needs forces the economy to do everything possible to make the best use of limited resources. Thus, we come to a very important concept - "efficiency". Efficiency refers to the best use of society's resources to meet its needs and requirements. More precisely, an economy works efficiently if it cannot be improved. economic situation one person without harming another.

Another element of the definition is that limited resources can be used in different ways. If only one method ever existed in the production of goods, and if the same means were used, then the problem of choice would not exist. In fact, there are always many various methods. The same product can be produced with different instruments, when using different raw materials, materials, etc. Therefore, we are talking about the alternative use of material and financial resources. Part of the funds can be directed to the implementation of some goals, and the rest to the implementation of others. It is impossible to use the same means simultaneously in different areas and achieve different goals. Each economic entity that has certain funds seeks to distribute them in such a way as to obtain maximum economic effects and thereby achieve its goals as best as possible.

In modern conditions, great importance for the flow economic processes It is provided by the state, whose role in different countries varies depending on the size of the public sector. The activities of a number of enterprises often go beyond the borders of a given country and in this sense they become economic entities on an international scale. In the process of economic activity, economic entities use such factors of production as labor, capital, land ( Natural resources), entrepreneurial skills. The owners of the factors of production receive income in the form of wages, interest, rents and lease payments, profits, and dividends in return for the resources they supply.

Thus, from the foregoing, we can conclude that in order to obtain correct answers to the question of economic choice, it is necessary to know the capabilities of the economic system, the state of the market, and the factors that shape supply and demand.

Conclusion

In the course of the course work, the following tasks were solved:

1) characterize the concept and economic essence of opportunity costs, highlight the types of opportunity costs;

2) show the importance of opportunity costs in economic choice;

3) consider the problem of economic choice, give examples, suggest ways to solve it.

As a result, the following conclusions can be drawn:

1. Opportunity costs are the costs of issuing goods, determined by the cost of the best lost opportunity to use production resources, ensuring maximum profit. According to the law of increasing opportunity cost, the production of additional units of one product entails sacrificing an increasing number of units of another product. In accordance with the law of diminishing returns, a continuous increase in the use of one resource, combined with an unchanged amount of other resources, at a certain stage leads to the cessation of the growth of returns from it, and then to its reduction. Opportunity costs are associated with lost profits and arise when making economic decisions.

2. Opportunity costs are directly related to the adoption of various economic decisions. That is, one business opportunity is compared with another and the difference between them determines whether one of these opportunities will be realized. The idea of understanding opportunity costs is that the decision maker acts rationally, that is, if he refuses to choose a certain course of action, he would choose the next best alternative. The decision maker may miss out on a cash benefit when choosing a course of action. The opportunity cost of a decision to use an alternative is the change or outflow of cash to the entity as a result of that decision being made and for no other reason. Thus, the chosen possible alternative course of action is significant only when it brings the greatest cash flow. When evaluating any possible transaction, the Decision Maker must determine how much more cash can be obtained with this decision option than with an alternative course of action.

3. The problem of choice is endless. The word “choice” itself means that there are many solutions from which the optimal one should be chosen, that is, the option that provides the maximum product at the minimum cost. Choice, as a subjective will, requires a corresponding material force, which is production. It is production that makes it possible to realize the right of choice of each consumer and producer in conditions of limited resources.

The choice of one of the economic options for the use of resources is the best ratio of costs and results. It is known that each resource can be used to meet different needs; in addition, the technology of its use may be different. Based on this, the meaning or content of choice as an economic category is the search for the best, the best option use of resources from all possible.

Bibliography

1. Nureev R.M. Microeconomics course: A textbook for universities. -- 2nd ed., rev. - M.: Publishing house NORMA, 2002. - 572 p.

2. Artamonov V.S., Popov A.I., Ivanov S.A., Utkin N.I., Alekseev E.B., Makhlaev A.N. Microeconomics: Textbook. - St. Petersburg: Peter, 2009. - 320 p.: ill.

3. Zhuravleva G.P. Economics: Textbook. - M.: Jurist, 2001.

4. Kondrakov N.P., Ivanova M.A. Accounting management accounting: Textbook. - M.: Infra-M, 2005.

5. Economics of the enterprise: a textbook for universities / V.Ya. Gorfinkel [and others]; ed. V.Ya. Gorfinkel, V.A. Schwander. - 3rd ed. revised and additional - M.: UNITI, 2004. - 718s.

6. McConnell K.R., Brew S.L. Economics: principles, problems and politics: Per. from the 14th English. Ed. - M.: INFRA-M, 2003. - XXXVI, 972 p.

7. Artamonov V.S., Popov A.I., Ivanov S.A., Utkin N.I., Alekseev E.B., Makhlaev A.N. Microeconomics: Textbook. - St. Petersburg: Peter, 2009. - 320 p.: ill.

8. Gerasimov B.I., Chetvergova N.V., Spiridonov S.P., Dyakova O.V. Economics: an introduction to economic analysis: Proc. allowance / Under the total. ed. Dr. Economics. sciences, prof. B.I. Gerasimov. Tambov: Tambov Publishing House. state tech. un-ta, 2003. 136 p.

9. Lavrov E.I., Kapoguzov E.A. Economic growth: theories and problems: tutorial. - Omsk: Publishing House of OmGU, 2006. - 214 p.

10. Gukasyan G.M. Economics from "A" to "Z": Thematic reference book. - M.: INFRA-M, 2007. - 480 p.

Hosted on Allbest.ru

...