Page 5 - FLIP BOOK ECONOMIC PROBLEMS AND HOW TO SOLVE THEM BY SELA PUTRI AGUSTIANI

C. Definition of Opportunity Cost

Income that could have been obtained or costs that could have been saved by choosing an
alternative investment of funds that is more attractive than what has been considered; the cost
arises because of the source of funds lost due to the adoption of other alternatives that are
considered better, for example, investment in bonds is more attractive than deposits (opportunity
cost).Opportunity cost or opportunity cost (English: Opportunity Cost) is the cost incurred when
choosing an activity. Unlike everyday costs, opportunity costs arise from alternative activities
that we cannot do.

1.Characteristics of Opportunity Costs

 Opportunity cost calculations are not always related to money. But it can be in the
form of time, pleasure, future profits and others.
 It has many possibilities related to its use.
 Opportunity cost decision making depends on the goals and situation of the
company/individual.
 Opportunity cost is usually a secondary or tertiary need.

2.Example of Choice of goods from Opportunity Cost

 An example of opportunity cost on employment opportunity is Faris is offered to
work in a company with a salary of Rp1,000,000.00 per month. On the other
hand, Faris has the skills and capital to produce an item with the opportunity to
earn a profit of IDR5,000,000 per month, but after going through the production
and promotion process for 4 months. From the illustration above, if Faris prefers
to take the opportunity to do his own production then he has lost the opportunity
to work for someone else with a salary of Rp1,000,000.00 for 4 months. That is
what is meant by opportunity cost. So the amount of opportunity cost for Faris for
4 months is 4 x Rp1,000,000.00, which is Rp4,000,000.00.

D. Financial Priority Scale

Priority scale is the preparation of a list of needs starting from something that is most important
and urgent to fulfill. This list will make it easier for someone to make decisions in meeting needs
and avoid consumptive behavior.

Factors that Affect Priority Scale

 Revenue
 Income
 Income is the most basic thing in determining the priority scale. The amount of a person's
income can influence decision making to meet their needs and can make a person have