Can a commodity have zero opportunity cost? Explain.

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If we are asking this question from the point of view of the consumer, the answer is no.  Whenever we use any money to purchase a good, we give up the chance to use that particular bit of money to buy anything else.  We may have plenty of other money,...

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If we are asking this question from the point of view of the consumer, the answer is no.  Whenever we use any money to purchase a good, we give up the chance to use that particular bit of money to buy anything else.  We may have plenty of other money, but the money used to buy that commodity can never be used for an alternate use.  This means every purchase of a commodity has an opportunity cost.

If we ask this question from a producer’s point of view, the answer is “probably not.”  It is theoretically possible for something to have zero opportunity cost, but it is extremely unlikely.  In general, every time you produce a commodity, you give up the chance to produce some other commodity or to use your resources for some other purpose.  Let us say that there is some piece of land on which only one commodity can be grown.  This land is not usable for any other commodity.  In that sense, there is no opportunity cost involved with using the land itself.  However, even in that circumstance you will incur opportunity costs because the labor that you put into harvesting the commodity could have been put to some other use.  Theoretically, you could have a piece of land with no other use and laborers who could not be doing anything else, but this is highly unlikely.  In general, there is an opportunity cost associated with producing any commodity.

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