The graphs in Chapter 1 represent the outputs created from specific inputs. They illustrate the attainable and unattainable areas for production as well as the opportunity costs for increasing or decreasing production of outputs. As resources are scarce, only a certain amount of output A or output B can be produced at any given time. This choice is illustrated by the different points along the graph which depict the number of each output that can be produced using the same number of inputs. Opportunity cost is determined by what is given up as a result of making the choice to produce one output over another.
I am constantly facing choices with my business which is a crafting business. I need to decide what to make with the materials I have in order to receive the most profit. I need to take into consideration the amount of material an item may use to make, the amount of time is required for creating the item, how much the item will sell for as well as what the demand for the item is.
The most significant opportunity cost I have faced since returning to school is the amount of time I have to work on my business. The time I am able to spend with my family remains unchanged as my children are only awake for a certain period of time and my business is usually completed during the evening while they are asleep. School is now taking the place of the time I spend on my business and therefore my output will decrease; however, the return of completing all of my classes will be a higher rate of pay and more opportunities at my workplace.
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