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Economics Opportunity Cost
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Economics: Opportunity Cost
Opportunity cost is the cost or value of the next best alternative of a choice in decision making. In every circumstance, individuals are surrounded by situations that require decision making. This present a field of choices and all has consequences. Through the analysis of every choice an individual must be prepared to suffer the cost of forgoing an alternative best choice for the same situation. This paper assesses some of the opportunity costs that can be suffered in the process of seeing Good Times in concert.
Every value is associated with some cost and in this case, the value (utility) which determines the level of satisfaction of want is attained through attending a concert. It is also true that resources are limited in supply, and the resource in this case is the available finance to attend a concert, which is $150. This case also presents choices, that including seeing concert in ‘‘Hot Stuff’’ and the other choice is seeing the concert in the ‘‘Good Times Band’’. The criticality of the matter is that all cases will help in deriving the same level of satisfaction, i.e. seeing the concert. However, the analysis of each alternative provides a slight contrast of consequences considering that there is a morning exams.
The cost of value that can be attained at ‘‘Hot Stuff’’ is $225. Considering that the amount available is $150, other options like borrowing may come into focus, but there is another alternative at the ‘‘Good Times Band’’. In ‘‘Good Times Band’’, the cost of seeing the concert is valued at $150. The perfect match of all the alternatives is that both ‘‘Good Times Band’’ and the ‘‘Hot Stuff’’ price the ticket per head at $150. Therefore, considering the amount available, there is a perfect possibility of attending either of the concerts. However, although seeing the concert at ‘‘Hot Stuff’’ may have other additional advantages and entertainments, there is a constraint of the money. Therefore, it is economically wise to attend the concert at the ‘‘Good Times Band’’.
Being a student with exams in the following morning, the distance between school and either of ‘‘Hot Stuff’’ and “Good Times Band” is very important. Therefore, considering that attending the concert at ‘‘Hot Stuff’’ would take hours to drive to the place, it would actually become very difficult to make it to the morning exams at school. Therefore, the option of attending the concert at ‘‘Hot Stuff’’ must be forgone. The cost of $75, i.e. $225-150 difference means that it would have derived unimaginable level of satisfaction. However, that level of satisfaction, valued at $75 becomes the opportunity cost that must forgone by attending the concert at “Good Times Band” in order to catch the morning exams at school.
The understanding of opportunity cost makes an individual to argue both economically and logically by making an alternative choice that best satisfy his or her wants, while at the same time considering all the surrounding costs and consequences. In this case, choosing to attend the concert at “Good Times Band” is very logical considering that the distance to be travelled is considerate due to school, and catching the morning exams would not be a problem. It is also economical for at student level considering that it costs $75 less than attending the same concert at ‘Hot Stuff’.
Economics of Sustainability
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Economics of Sustainability
Introduction
The degree of the problems recently besetting the natural resources and environment reflects the significant social economic progress attained in the 20th century. The increasing economic activities around the world have a significant impact on the environment, such as transport, energy, construction, industry and agriculture. These developments pose a genuine danger to the global environmental balance. The term sustainable development was created in 1987 by the United Nations Commission of Environment and Development. The term was coined to refer to the endurance of the human species and maintenance of the productivity of naturally, generated and human resources from one generation to the other. Sustainable development is progress that meets the requirements of the current generation without compromising the capability of future generations to satisfy their own necessities (Pezzey and Toman, 2002, p. 25).
Sustainable development has turned into one of the topics in contemporary economics. Over the past several years, the Club of Rome indicated the limitations of economic progress emanating from scarcity of natural resources and environmental destruction. Over the years, economic activities of western industrial nations have been to shun these limitations. These countries have strived to establish conditions that could ensure sustainable development in an ecological and economic sense. In the modern economics, the emergence of the term sustainable development has led to modifications in nearly each aspect of production and consumption patterns. The discussion of the concepts of sustainable development usually generates heated debates especially among the arguments of neoclassical economics and environmentalists. The paper seeks to discuss the basic, mainstream economics concepts agreeing or disagreeing with the core concepts of sustainability (Kant and Berry, 2005, p. 37).
Core Concepts of Sustainability
As Berg, 1996, p. 55 observes, there are three vital features of sustainable development; social sustainability, economic sustainability, and environmental sustainability. Environmental sustainability is described as maintenance of life supporting systems. An environmental, sustainable structure should maintain a constant resource base, shunning over exploitation of renewable resources and draining non-renewable resources simply to the level in which investment is made in sufficient substitutes. This entails maintenance of atmospheric stability, biodiversity, and other ecosystem functions, which are not customarily classified as economic resources. Economic stability is described as preservation of economic capital. This definition relies on the Hicksian description of income; the optimal amount of income, which may be spent with no reduction of the future real consumption.
An economic, sustainable structure should be capable of producing services and products on an enduring basis. Second it should be capable of maintaining manageable levels of external and internal debt. Third it should be capable of avoiding extreme imbalances between sectors, which harm industrial or agricultural production. Social sustainability is described as preservation of social capital. A socially sustainable structure should attain equality in opportunity and distribution, sufficient provision of social amenities, and political participation and accountability. Sustainable progress should incorporate the three kinds of sustainability and employ them and start making development sustainable (Ekins, 2000, p. 157).
Sustainability Models: Sustaining Capital Stock
As Daly, 2008, p. 62, notes, natural resources such as natural gas, oil, minerals, and coal are examples of resources, which are naturally subject to exhaustion. If the current rate of consumption of these resources continues, a situation will arise where these resources will be unavailable. However, inventions and technological advances can delay the exhaustion of these resources. Sustainable development is necessary to facilitate the substitute of services and products generated from non-renewable resources with services and products generated from renewable resources. Sustainable development is essential to diminish input of the environment and natural resources per unit of output. This means greater dependence reproducible capital; human made capital and human capital (knowledge).
Reproducible capital requires resources to build. Reproducible capital may diminish society’s dependence on natural resources through augmenting the effectiveness of every unit of service or product offered by renewable and non-renewable stocks. Neoclassical economics concepts agree that technological advancements, prices, innovations and inventions play a role in sustainability development. There are two perspectives that may be referred to as the neoclassical and the ecological paradigms or weak and strong sustainability, respectively. Various studies provide many reasons for favoring strong sustainability. First, various innate resources are vital for production, and their exhaustion would constitute a disastrous situation. Second, sustainability diminishes as a result of exhaustion of the capital stock (Daly, 2008, p. 65).
Lastly, the studies squabble that there are no replacements for various natural resources. This means that vital natural resources should be preserved in spite of the opportunity cost associated with such action. The ecological perspective downplays the role of technological change and prices in sustainability development. Prices are deemed to be imperfect indicators of the scarcity of resources as a result of market imperfections. The studies argue that prices do not represent the interests of upcoming generations, and since they reveal conditions at the edge, they cannot be employed to value total reserves of the resources. Prices cannot be depended upon, to indicate scarcity since owners of resources may have two optimistic outlooks on technological change (Hackett and Moore, 2011, p. 298).
Resource owners will persist to provide limited innate resources even as shortage augments for the worry that technological changes will lower future prices. The time horizon of private resource holders causes a lot of natural resources to be provided, therefore, depressing prices. As Hussein, 2008, p. 270 observes, the ecological perspective is pessimistic concerning the future role of technological advancement. According to this perspective technological change is deemed to be uncertain to depend on for resolving environmental problems. In terms of maintenance, the ecological view is that capital should be maintained separately as reproducible and natural capital and not as aggregate capital.
According to neoclassical economists view, suppliers of natural resources rely on the market conditions in the determination of prices. Technological changes lower the costs of production emanating from improvement of production processes and competition. In turn, this leads to reduction of prices of commodities in the market. In order to prevent their profit margins, suppliers of natural resources will regulate the amount of supply in the markets. This creates a shortage in the market leading to high prices. However, if there are different private resources holders in different regions, their supply may not change, thereby, reducing prices in the event of technological changes (Soderbaum, 2012, p.54).
As observed by Soderbaum, 2012, p.599, the second viewpoint regarding sustainability is the weak sustainability also known as the neoclassical model. The neoclassical model is the converse of the ecological outlook that natural resources imposes stern limitations on growth and an ecosystem collapse would result to economic collapse. The viewpoint of the neoclassical is that as capital become scarce, their comparative prices will increase, which results to maintenance and replacement towards alternative capital and the development and utilization of new technologies. Increasing comparative prices cause replacement away from the capital, which is becoming scarce. The neoclassical argues that this is what took place in the past and continues today.
The neoclassical point out that the elasticity of substitution between natural resources and reproducible capital is high. Neoclassical economists indicate that there are two likelihoods of sustaining growth. First, there is probable adequate substitutability between renewable capital and non-renewable capital in which economic development may be sustained while producing an incessant decline in the non-renewable capital stock. In the case of oil resources, this argument will be accurate if economies become more dependent on public transportation or individuals purchase only the most fuel efficient automobiles (Maples, 2005, p. 100). Second, technical change will inexorably enable society to move from dependence on one non-renewable resource to another. For example, previously trains used coal and later converted to oil. Currently there are trains, for example, in Belgium, which are using solar energy a renewable resource (Rogers and Boyd, 2012, p.62).
Economists do not deny that, it is complicated to measure precisely how past technological change has influenced, the elasticity of replacement between renewable and natural capital. However, economists agree that technological advancement has made an impact on the three aspects of sustainable development. As a result, economists are optimistic regarding the potential for technical change in the future. The neoclassical economists’ outlook on sustainability of capital stock pertains to the flow of returns from capital. The goal is to maximize the annual revenue, which may be generated from the natural capital over the entire remaining period (Sterling, 2012, p. 180).
Net income from a non-renewable resource ought to be allocated into a capital component and an income component. The capital constituent is to be saved and invested at the actual rate of discount. The amount of income allotted to the capital constituent as opposed income constituent is determined as follows. After the depletion of the natural resource, the capital constituent will require to generate yearly revenue in perpetuity, which is equivalent to the revenue generated during the period when the mine was in operation. The implicit supposition is that renewable and non-renewable resources are infinitely substitutable. This implies that the economy will not collapse as a result of exhaustion of the natural resources (Sterling, 2012, p. 185).12
Neoclassical describes sustainability in terms of welfare maximization over time. Various economists simplify this concept through recognizing welfare maximization with optimization of satisfaction derived from consumption. As per standard economic hypothesis, efficient resource allocation ought to have the effect of optimizing utility from consumption. If time discounting method is employed in comparing the financial values of consumption in diverse periods, then sustainability may mean efficient resource allocation. The use of discount rate imposes a specific alternative concerning the relative wellbeing of current and future generations. Studies have shown that the selection of a rate of discount is equivalent to a selection of allocations amongst generations (Gechev, 2005, p. 69).
Use of the prevailing market rate of discount provides excessive credence to the preferences of the present consumers. If issues such as greenhouse gases emissions and soil erosion are considered, this creates a sturdy bias against sustainability. The bias arises from the reality that most of the ecological degradation impacts such as greenhouse emissions and soil erosion are felt by future generations. Economists, therefore, argues that to attain intergenerational fairness, an economy should impose a low rate of discount or a form of sustainability regulation concerning resource utilization and environmental impacts. This implies that both the neoclassical and ecological views regarding sustainability agree on the need of adopting strategies, which will ensure sustainable development (Sustainable Measures, 2010).
The above discussion shows that, strong and weak sustainability are explained in stipulations of whether natural and reproducible resources are to be reserved separately (strong sustainability) or intact together (weak sustainability). Weak sustainability necessitates a high level of substitutability between natural and reproducible resources, while strong sustainability supposes that these forms of capital are complements instead of substitutes in various production functions. Neoclassical economists argue that, provided that natural resources, which are being depleted, are substituted with more valuable human made resources, and then the value of aggregate capital stock is augmenting over time. This aggregate capital stock comprises of both the remaining natural resources and human made capital (Gechev, 2005, p. 72).
Strong sustainability emphasizes that there are restrictions to substitutability between reproducible and natural resources. However, strong sustainability proposes that it is complicated to guarantee maintenance of future economic opportunities without enforcing some restrictions on the exhaustion of natural resources. Various strategies aimed at reducing environmental degradation involve the use of prices and technological change. For example, carbon tax is a form of direct levy imposed on the content of carbon found in fossil fuels. Imposition of carbon tax leads to high prices of products produced using fossil fuels. The tax is an economically efficient way of conveying vital price signal, which encourage carbon reducing investment. This facilitates innovations of the production processes, leading to improvement of production processes and efficient allocation of resources (Hill and Terry, 2006, p.298).
Conclusion
Sustainable development is the development, which does not undermine or devastate the social, ecological and economic basis on which sustained development relies. There are three fundamental concepts of sustainability; social sustainability, environmental sustainability, and economic sustainability. There are two sustainability perspectives; ecological perspective and neoclassical perspective. The two principles are also referred to as strong sustainability and weak sustainability. These two perspectives have different arguments regarding sustainability, although there are various complementing arguments. Weak sustainability necessitates a high level of substitutability between natural and reproducible resources, while strong sustainability supposes that these forms of capital are complements instead of substitutes in various production functions.
Policy Recommendations
Various economies derive their sustainable development policies and problems from Agenda 21, which was espoused by over 178 countries at the UNCED (United Nations Conference on Environment and Development), which was held in Brazil, in 1992. Agenda 21 provides programs and policies to attain sustainable equilibrium between population, consumption and the environment (United Nations, 2009). The developing economies need to eliminate poverty through providing poor individuals more access to the capital they want to survive sustainably. This will reduce the environmental degradation emanating from poverty, for example, deforestation in most developing countries. Carbon trading needs to be facilitated to ensure that developed countries play a more significant role in preserving the environment. Developed nations should provide funding and capacity to plan and implement sustainable development resolutions. This will facilitate the transfer of skills and information regarding environmental conservation. All governments should espouse national plans for sustainable growth. For example, North America has adopted policies to reduce greenhouse gases emissions such as cap and trade and carbon tax policies. Belgium is another country, which is generating solar energy to run their locomotives.
Bibliography
Pezzey, John and Toman, Michael. The Economics of Sustainability. London: Ashgate Publishing, 2002.
Kant, Shashi and Berry, Albert. Economics, Sustainability, and Natural Resources. Dordrecht: Springer, 2005.
Bergh, Jeroen. Ecological Economics and Sustainable Development. Cheltenham: Edward Elgar Publishing, 1996.
Ekins, Paul. Economic Growth and Environmental Sustainability. New York: Routledge, 2000.
Daly, Herman. Ecological Economics and Sustainable Development. Northampton: Edward Elgar Publishing, 2008.
United Nations .Agenda 21. United Nations Department of Economic and Social Affairs. New York: Division for Sustainable Development, 2009. Accessed from: HYPERLINK “http://www.un.org/esa/sustdev/documents/agenda21/index.htm” http://www.un.org/esa/sustdev/documents/agenda21/index.htm June 22, 2012.
Hackett, Steven and Moore, Michal. Environmental and Natural Resources Economics. New York: M.E. Sharpe, 2011.
Hussein, Ahmed. Principles of Environmental Economics. New York: Routledge, 2008.
Sustainable Measures. Introduction to Sustainability Development. West Hartford: Sustainable Measures, 2010. Accessed from: HYPERLINK “http://www.sustainablemeasures.com/node/42” http://www.sustainablemeasures.com/node/42 June 22, 2012.
Soderbaum, Peter. Understanding Sustainability Economics. New York: Routledge, 2012.
Rogers, Peter and Boyd, John. An Introduction to Sustainable Development. New York: Routledge, 2012.
Sterling, Stephen. Sustainability: Perspectives and Practice across Higher Education. New York: CRC Press, 2012.
Gechev, Rumen. Sustainable Development: Economic Aspects. Indianapolis: University of Indianapolis Press, 2005.
Hill, Jennifer and Terry, Alan. Sustainable Development. Hampshire: Ashgate Publishing, 2006.
Maples, Alexander. Sustainable Development. New York: Nova Publishers, 2005.
Health-Related Quality of Life and Well-Being
Health-Related Quality of Life and Well-Being
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Introduction to the program
Health-related quality of life and well-being forms an important concept in the healthcare sector dealing issues related to mental, emotional, physical, and social functioning of the population. The concept emphasizes on the impact of health status of an individual to the quality of life. In addition, the concept determines the health status of the population, determines life expectancy, and mortality rates (Healthy People 2020, 2014). Public health officials in Bradenton Florida use health-related quality of life and well-being to determine the impact of illnesses, especially chronic diseases, and other types of health-related issues of the community. One of the major concerns of the concept in the community is the access to quality and affordable health care services. Residents at Bradenton Florida always complain of the poor quality of health services that interfere with the well-being of community members.
The Florida’s department of health promotes activities that ensure improvement of health and well-being of all citizens regardless of their community of origin. Bradenton health data and statistical tools show that each year thousands of people die from chronic and other diseases because of the lack of proper health care services. The present cancer prevalence in Florida is approximately 8000 people. In addition, the area experiences high mortality rates because of the lack of health care knowledge among pregnant mothers (Florida Health, 2014).
Proposed program
The Bradenton population requires quick intervention to the issue in order to free people from contacting chronic diseases, high death rates, and access health more easily. The three areas the show challenges include achieving the aims of making healthcare effective, timely, and efficient. Poor management of information and communications process results in unnecessary costs, reduced quality of healthcare and inefficiencies. The use of mobile health technology (M-Health) would assist in solving the problem. M-health integrates computer science, information science and nursing science to manage and transmit communication data, knowledge and information in nursing practice. The program supports nurses, patients and other healthcare providers in achieving the high level of health care practices and improving the quality of health and well-being of every member in the community.
Current innovation for improving the health of the community
Access to quality and improved health services increases the quality of life and well-being of people. Innovations play a significant role in health care improvement process. The people of Bradenton have devised various ideas aimed at improving the health of the community in collaboration with the government health sector. The people in the community suffer from most chronic diseases such as cancer, diabetes, and hypertension among others. Lack of proper set standards in the past led to the spread of these diseases, but with the current innovations the prevalence has decreased. One of the best innovations adapted in the community is transfer of health knowledge among people. A person who knows better does better. The Florida health care department with collaboration with local mobile networks has come up with many healthcare improvement programs. The application of electronic medical records, patient portals, and other forms of technologies used in health care facilities form some examples of such innovations (Newbower, 2008).
Application of health care innovation in innovations in Bradenton Florida nursing homes helps in increasing the quality of life and well-being among people in the community. The availability of resources such as money and skilled work force allows the hospital implement all their strategies and promote quality patient outcome (Anonymous, 2014). Moreover, these innovations have created a big impact in the health industry by reducing the number of hospital deaths, decreasing the number of chronic diseases cases, and reducing medical errors (Lunney, 2009). As healthcare innovation continuous growing in Florida, healthcare experts introduce new ideas like the above-proposed M-Health program.
Developing the M-Health program
Healthcare innovative programs assist in creating health awareness to the people in the community. Health education for screening and treating will be of greater essence to the people of Bradenton Florida for improving their quality of life and well-being. In addition, the program will help reduce the number of disease infections by educating people on the best practices to keep healthy. The program will utilize nursing informatics process for its implementation. Knowledge of various causes of diseases will be incorporated in the program. The information that the program will provide to its subscribers include knowledge of sexual risks, chronic diseases, communicable diseases, and healthy lifestyle.
The M-Health health care program is as an important technology for keeping in touch with and following up on patients with different health conditions. The program uses mobile telephone gadgets to notify people about various health issues. The ideas shared on mobile networks include educating people on how to live a healthy lifestyle, knowledge on symptoms of certain diseases, the best hospitals to access health care services, and how to cater for the sick at home. It forms an interactive process between a patient and a nurse that occurs over the mobile.
The M-Health program would improve access to the appropriate level and type of health services, streamline processes, and improve overall efficiency in nursing practice. It would also significantly reduce costs of care delivery to chronically ill patients. In addition, the innovation will assist patients with quick access to patient education, lab results, symptom management, medication, and prescription refills through their mobile phones. It also improves self-care management results for chronically ill patients.
Program implementation
According to Hendricks (2014), healthcare technology brings about reliable clinical practice guidelines capable of assisting in the effective communication between nurses and patients and facilitates effective communication between patients and health care providers. Medical records are extremely significant in medical facilities, and the technology has influenced proper recording of health data, which makes it extremely useful. Moreover, the standardized health care language improves knowledge among practicing nurses through enhanced data collection, quality information, and wisdom.
The adoption of M-Health technology occurs in two phases. Phase one involves adopting the requisite standards of practice, standardizing documentation, designing protocols, and training staff. Phase two involves the actual implementation of the technology. A team of researchers will be deployed to the community to monitor the implementation of the program. Their main duties include educating people on how to subscribe to the program using their mobile phones. Data collected is summarized on a weekly basis. Statistics such as the number of subscribers, positive feedbacks, and the impact of the program to the community will be analyzed to evaluate the quality of service delivery.
The first process in the implementation plan will involve documentation. Documentation forms a major aspect in nursing informatics because quality care is dependent on effective communication. Nursing informatics improves the accuracy and timeliness of patient charting when effectively used (Savel and Foldy, 2012). Nurses can be involved in the process of improvement by ensuring that they feed all the necessary information about a certain illness to the internet and pass it to the mobile gadgets of all M-Health registered users. Any mobile gadget can receive health care information from the program. Those whose phones cannot connect to the internet will require registering for text messages alerts on their phones. Each text message will cost the user little amount of money to cater for mobile provider cost. On the other hand, those with internet enabled phones, especially the smart phones will have the added advantage because the program can be downloaded and installed in a smart phone.
The second phase of the implementation process involves research on the suitability of the program to the people in the community. The team of researchers will help people in downloading and installing the application on their phones. In addition, the health care sector will conduct many awareness campaigns on the implementation of the program to make more people aware and subscribe to the plan. Disease diagnosis is a process where a clinical examination and judgment are made about a given medical problem presented by the patient. M-Health program will help classify and describe activities that nurse undertake during the diagnosis process. Knowledge plays a major role in making such classifications and determining the best approach to take in solving a medical problem. All nurses must possess the knowledge of standardized technologies used in the health care sector today (Ackley, 2010).
Conclusion
Health-related quality of life and well-being is an important topic in the healthcare sector. The topic makes people more knowledgeable on different aspects of health and necessities that promote healthy living and a good lifestyle. The discussion recommends the application of the mobile health program to improve the quality of health in Bradenton community. The application of this program would yield better results and improve health quality among people in Florida.
References
Ackley, B. (2010). Nursing Diagnosis Handbook. Chicago: Elsevier Health Sciences.
Anonymous. (2013, November 25). AHRQ Innovations Exchange. AHRQ Innovations Exchange. Retrieved September 24, 2014, from
http://www.innovations.ahrq.gov
Florida Health. (2014). Florida Vital Statistics Annual Report 2013. Florida: State of Florida Department of Health. Retrieved from http://www.flpublichealth.com/VSBOOK/pdf/2013/Intro.pdf
Healthy People 2020 (2014). About Healthy People. Foundation Health Measures. Health-Related Quality of Life and Well-Being Retrieved from:
http://healthypeople.gov/2020/about/QoLWBabout.aspx.
Hendricks, D. (2013, May 14). How Technology Is Changing the Medical and Health Care Field. The Huffington Post. Retrieved September 5, 2014, from http://www.huffingtonpost.com/drew-hendricks/how-technology-is-changin_b_3273542.html
Lunney, M. (2009). Critical Thinking To Achieve a Positive Health Outcome. New York: John
Willey.
Newbower, R. S. (2008). A group discussion: What’s ahead for medical technology innovation
and use. Biomedical Instrumentation & Technology, 16-22. Retrieved from http://search.proquest.com/docview/208680859?accountid=35812
Savel, T. G. and Foldy, S. (2012). The Role of Public Health Informatics in Enhancing Public
Health Surveillance. Morbidity and Mortality Weekly Report (MMWR), 61(03), 20-24