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Opportunity Cost, Part Three of Three – Why This Matters In Business

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This is the third in a series of articles on Opportunity Cost and why it matters in business.

Part One

Part Two

 

Opportunity cost is one of the most important concepts in all of economics. If you understand it, you can start to see the world in a slightly different way. It’s also one of the most relevant economic concepts to simple business decisions. (more…)

Opportunity Cost Part Two

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If you didn’t see the first post on opportunity cost, you need to read that first. It is here.

 

For those of you who have read that post, let’s continue…

 

If you remember, in part 1 of this article, I asked you to consider this scenario:

You’ve just won a ticket to see Eric Clapton in concert tonight. You can’t resell the ticket. The only other thing you might want to do tonight is see Bob Dylan in concert. Assume that both concerts are the only gigs each performer is playing that you could get to in the foreseeable future.

The Dylan ticket costs £40. You quite like Bob Dylan, and normally, you would be prepared to spend up to £50 to see a Dylan concert. If Dylan tickets cost more than £50 you would think that too expensive and you wouldn’t go even if you had nothing else to do.

What is the opportunity cost of attending the Clapton concert? (more…)

Important Economics Concepts Every Businessman Should Know, Number 1: Opportunity Cost

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Let’s say you pay your office cleaners £20 to clean the office each night. You could actually clean the entire office yourself and you wouldn’t have to pay anyone £20, just a few quid on cleaning consumables, dusters etc. Now you know that the reason you don’t is because it would take you a couple of hours to do it, and if you were to spend an extra two hours a day at work, there are far more useful and lucrative things you could be doing with your time. So while the cost of you doing the cleaning should take into account the £20 you’re saving by not paying the cleaners, it also needs to take into account the profit the company would have made but now won’t see on the extra sales that you would have made with an extra couple of hours in the office. That, in a nutshell, is what opportunity cost is all about. (more…)

Do you want a Concorde website or a 747 website?

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This BBC website article annoyed me when I saw it a while back. Or at least, not the article so much but the examples of “good design” in the accompanying photographs.

So that’s a bunch of ugly, hard, uncomfortable plastic chairs and a stupidly expensive, noisy and uncomfortable plane. Is this really “good design”? (more…)

Friends don’t let friends use Internet Explorer 6

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IE6 is 10 years old.  TEN!   And it was never very good.  If YOU or any of your family or friends are using IE6, please consider using software that isn’t approaching puberty? It’s safer!  It’s better!  It’s all round the Right Thing to Do!

I have someone reporting a site not displaying quite right in IE6. I don’t consider this an error.  I consider this to be a form of public service.

http://www.ie6countdown.com/