Answer to Question #146531 in Microeconomics for ahsan

Question

in past 50 years the frozen food industry in U.S has grown from $1billion to $27 billion. Discuss the role of opportunity cost in our lives with regards to this huge growth in the frozen food market in the U.S

Answer 1

Opportunity cost is the value of the next best alternative when a decision is made. It is the loss of other alternatives when one alternative is chosen, alternative is the keyword which is always associated with opportunity costs. Opportunity costs represent the potential benefits that can be missed out by choosing another alternative. The growth of the frozen dinner entree market in the last 50 years is a good example of the role of opportunity costs in our lives. One of the most significant social changes in the U.S. economy in this period has been the increased participation of women in the labor force. For example, in 1950, only 24 % of married women worked; by 2013, that fraction had risen to 58 %. Producing a meal takes two basic ingredients: food and time. When both husbands and wives work, the opportunity cost of time for housework, including making meals, grows. This tells us that making a home-cooked meal became more expensive in the last 50 years. A natural result is to shift people toward labor-saving ways to make meals. Frozen food is a solution to the problem of increased opportunity costs.