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Economics/Opportunity cost

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Question
QUESTION: Hello,

I need guidance on how to elaborate on these questions.

‘’The opportunity cost of using unemployed labour is zero.’’
(a)   Do you agree with the statement? Give reasons for your answer.
(b)   How would you explain the unemployment of labour in the light of the statement?

Thank you

ANSWER: I would not say the opportunity cost is 0, but exactly what the opportunity cost is will depend on the perspective. Are you wanting the opportunity cost for the employer?  For society?  To whose opportunity cost are we referring?

---------- FOLLOW-UP ----------

QUESTION: In the viewpoint of the individual, the economy as a whole, the government. The question is not limited to a specific perspective.

Thanks

Answer
There's always an opportunity cost.  For the hiring company, the opportunity cost is the cost of hiring an already employed individual.  This will be very case dependent, since an already employed individual will most likely demand higher wages than someone who is desperate for a job just to pay their bills, but at the same time, the employed individual has more recent experience, which could make them more productive or, at the very least, lessen the orientation period.

Other than that, the opportunity cost is what the unemployed individual would otherwise be doing with their time.  When people are unemployed, they often turn to creative pursuits to find ways to make a living.  Maybe they'll go self-employed, maybe they'll try writing, or inventing, or any of a number of other comparatively unorthodox pursuits that come from having an excess of free time and a shortage of money.  Individuals tend to, on average, prefer the security of a full time, regular job, compared to the uncertainty of these other pursuits.  There will be, of course, a proportion of people who excel in this environment and produce grand innovations.  Really, though, everyone would be better-off if more people learned to be self-employed, entrepreneurial, or otherwise innovative in this way.  I'm not going to say a long period of unemployment is good for anyone, but I hope that the world as a whole learns from this experience to create opportunities where they did not before exist.

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Michael Taillard

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Accepts most economic questions

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Economic Consulting: American Red Cross; US Strategic Command -- Economics Lecturing: Bellevue University (Bellevue, NE) Huijia College (Beijing), OPII Schools (Omaha), Madonna University (Livonia), Schoolcraft College (Livonia), ZomBCon (Seattle), Zombiefest (Lincoln) -- Media Appearances: Dead Man Working (2012 Movie documentary), The Heartland News (Omaha local news outlet)

Organizations
American Economics Association, Business Networks International, Midwest Writer's Guild, Zombie Research Society

Publications
Economics and Modern Warfare: The Invisible Fist of the Market (Palgrave Macmillan) -- 101 Things Everyone Should Know about Global Economics (Adams Media) -- Corporate Finance for Dummies (Wiley) -- Psychology and Modern Warfare (Palgrave Macmillan) -- Analytics and Modern Warfare (Palgrave Macmillan)

Education/Credentials
PhD (Financial Economics; honors) -- MBA (International Business Finance; honors) -- Grad School Certificate (International Business Management; honors) -- BS (International Business Economics; honors) -- AA (Business Administration; honors) -- Certificate (Chinese Language and Culture) -- Trade School (Transportation Logistics; honors)

Awards and Honors
Philanthropy awards and nominations for the OPII Schools economic experiment

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