Chap. 3 Opportunity cost

Opportunity cost is defined what must be sacrificed to obtain something in return. It basically equates two different situations. The opportunity cost of doing homework is equal to 45 minutes of sleep. The opportunity cost of moving a pawn to a particular square, could be equally possible as moving to another, or moving another piece. Basically it is very linked to outcome happening probability concept. Often time and money are used as references. An event can have different 机会成本 at the same time. But then, the chances that the alternative possible event happens is usually less than 50%.  We call the expected happening 机0. The independence of two events can be verified, either algebraiclly or rationally. We will focus on the latter.



Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s