Exercise 1-2: Production possibilities

During Chapter 1 of our textbook “Principles of Microeconomics (Sayre and Morris, 2009) we have learned what the production possibilities for an economy and the opportunity cost associated with the choices made are. Depending on the choices an economy makes in what to produce, how to produce it, and who to produce it for, it will experience different rates of growth. We have also learned, that there is no right or wrong answer in general, since every economy has different capital equipment and resources available.

I think most of us experience and deal with scarcity on a daily basis. We all have dreams and goals. We have to make choices and decide which goals and dreams to realize first and what sacrifices to make in order to have enough resources, including time, money and others, to achieve our goals.

For me personally, going back to school and study at SAIT meant taking a step towards my goal of getting a Diploma and later a Bachelor degree, but it came at a significant cost. At the time I started my Business Administration Diploma program, my daughter was 2 months old. I had to give up a lot of my time that I could have spent with her, for studying. I also wasn’t getting any financial support by my employer. However, I have managed to keep my opportunity costs to a minimum thanks to the format of my studies. By studying online, I save time for driving to school and for parking. I also have the flexibility of studying mostly when my daughter is sleeping and take some breaks when she wakes up. I try to buy most of my textbooks used online and have saved hundreds of dollars doing so.

The choices I have made helped me land a better job. I already make a little more money than when I started my studies and my new employer is willing to help me with my study expenses in the future. It is likely, that I will continue to have a better income for the rest of my career as if I wouldn’t have studied. This means I will be able to support my family with a better income in the future and maybe retire a couple years earlier than if I wouldn’t have made the choice to study. So it is fair to say, that the opportunity cost I experience now, has already helped me grow and will continue helping me grow in the future, when I will earn the “interest” of time and money I spend now.