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I don't agree with the point you made about groceries. These costs are always fixed. No matter how much you earn. And therefore they are irrelevant to the oppor
by depablo 6y ago
I don't agree with the point you made about groceries. These costs are always fixed. No matter how much you earn. And therefore they are irrelevant to the opportunity cost.
For reference, if you earn 20k a month, your grocery expenses will roughly stay the same to earning 5k a month. They won't be 35% of your income (that would be 7000€ of groceries for 20k of income). Working more hours does not result in higher grocery costs.
- nicbou 6y agoStatic expenses also affect your disposable income. You can't pay someone with the money that's allocated to rent. Insurance is also a static cost past a certain income. Income tax is progressive. You still consider those. It just makes the gross/disposable income relationship non-linear.
- depablo 6y agoYes, but static expenses don't make a difference for opportunity costs. You have to pay these costs either way.