sayang! : of trade-offs and opportunity costs [reentry 2009]

students find economics so boring... i did too. did is the operative word, i repeat. but when i was asked to teach it, only then i realized that it's nothing but plain life disguised in specialized (technical) terms. since then too, it has become a challenge for me to deliver it in a manner so unlike the way it was delivered to me (double wink here).

one of my favorites is the kingdom of TANSTAAFL. students who have been here would just smile and say: yeah right! 'coz really, truly, in this world "there aint no such thing as a free lunch". nothing comes for free. everything has a trade-off. who doesn't understand trade-off? everyone knows what is is. everyone (save for a very chosen lucky few) knows how it feels of wanting but not having without something (or someone-dear me, or some time-that's more like it) in return.

defined by most economists as 'the highest valued benefit that must be sacrificed as a result of choosing an alternative', it tells us nothing but a trade-off...what have you given up the most in order to get what you wanted (or because you have decided to do something else). okay, if you are reading this blog now and it's taking you about an hour to digest this, bang! you just lost 25 pesos ($.50) if you have used the time working as a bus boy/girl in a fast food chain. see? that easy. but of course, there are many ways to make that harder. you have to read books, consult your teacher and do decent scholarly surfing for that.

one of the most important opportunity costs involves time---when used for one activity cannot be used for other activities. your time used for reading, net-surfing, studying, working, or shopping will not be available for other uses. here, your allocation of time is viewed like any decision you make---choose your use of time smartly! say, to meet your needs, to achieve your goals, and/or to satisfy personal values.

here's one i might need to remind myself...opportunity costs relate to health too. lack of sleep, poor eating habits, lack or avoiding physical exercise may result in illness, time away from productive activities like school and work, higher health care costs, and lower economic (eg. financial) security. hence, your personal resources (time, energy, health, abilities, knowledge) require careful management too or else you'd say 'sayang!' (what a waste!).

since we are a major player of the society (economy too) and we are the ones who constantly make choices among so many decisions, we must consider the opportunity costs all the time. for example, when it comes to money it's knowing that increases in an amount of money may be a result of interest earned so saving or investing instead of spending it today results in a future amount greater than the original money that you have. every time we spend, save, invest, or borrow money, we consider the time value of that money as an opportunity cost.

now, give it a try... what have you given up the most? that may be your opportunity cost. is it worth it?