1. Opportunity Cost and Public Decision-making
Juliet Elu, Ph.D.
Department of Economics
Morehouse College
Morehouse College Admitted Students Day
2017

2. Public Policy and Opportunity Cost
Events in Fort Worth Texas and other incidents where issues of local policing tactics have been displayed in the news media as questionable have played a large role in indictment, policy and procedures regarding police brutality. Some people even argue law enforcement agents are protected by a blue wall. Local officers of the court are now faced with the question: What is the opportunity cost of indicting and convicting a police officer in a high profile case?
How can we use the PPF to analyze this trade off?
Do you feel indicting police in high profile cases are worth the opportunity cost?

3. Opportunity Cost
The Opportunity Cost of a decision is the value of the next best alternative that must be given up because of that decision.
To illustrate opportunity costs in economics we use a Production Possibilities Frontier (PPF).
A PPF is a graph that shows the optimal quantities that can be produced from two goods given all available resources and the current state of technology. The main function of a PPF is to illustrate trade-offs.

4. An Example of Opportunity Costs Using a PPF
Earning all A’s
Recreational Activities

5. An Example of Opportunity Costs Using a PPF
Earning all A’s
Recreational Activities

6. An Example of Opportunity Costs Using a PPF
Earning all A’s
Recreational Activities

7. An Example of Laws Governing Police
Autonomy
Incidence of Crime

8. Discussion: Given that law enforcement officials can become discouraged by decreased autonomy, or “power hungry” from increased autonomy, what would you suggest to make sure law enforcement officials have more appropriate incentives while on duty? If you were a judge or a state attorney how would you approach this issue?

9. What is Economics?
Economics is the study of how individuals, businesses and governments allocate resources to deal with the unavoidable problem of scarcity.
Microeconomics studies decisions made by households, firms as well as state and local governments to optimize consumption, output and social welfare, respectively.
Macroeconomics studies decisions made by fiscal and monetary authorities regarding inflation, employment and output.

10. Subfields in Economics Include:
Mathematical and Quantitative Methods
Econometrics
Game Theory and Bargaining Theory
Experimental Economics
Microeconomics
Macroeconomics and Monetary Economics
The Business Cycle
Money and Interest Rates
International Economics and International Trade
Finance and Financial Economics
Public Economics, Taxation, and Government Spending
Health, Education, and Welfare
Labor and Demographic Economics
Law and Economics
Industrial Organization
Business Administration and Business Economics; Marketing; Accounting

11. Jobs in Economics Market Research Analyst Economic Consultant
Compensation and Benefits Manager
Actuary
Credit Analyst
Financial Analyst
Policy Analyst
Lawyer
Management Consultant
Business Reporter
Public Sector