Costs are around us everyday whether we realize it or not. Chapter 7 in the book proposes several different kinds of costs. Probably the most common cost we face everyday are opportunity costs. These are trade-off costs, or the cost of the highest valued alternative that must be foregone when a decision is made. I face this situation everyday when I make the decision to take a day off work to study, or pick an elective class of economics over a management class.
Major league sports face this cost every season. When deciding how much they should pay a certain player they must look at the opportunity cost of doing so. An article I found was about the Toronto Blue Jays in 2002, not signing Jose Cruz, when he wanted 5 million a season to play for them. The Blue Jays let him go and in return drafted 6 new players for a little over 6 million dollars. The opportunity cost the Blue Jays faced was giving up one of their most popular players for about the same price as getting 6 new players.
Sports team face opportunity costs like this one, every year when they do their draft picks. They must decide if a player is worth the money they want or if their is an opportunity cost out there for the team. It is amazing to me how economics can play into major league sports without most people even realizing it.