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The Opportunity Costs of Riding the KIS Bus

Everyday, we(or at least those of us who walk to/from school) can see the huge amount of buses going down and up the hill, transporting hundreds of students to different areas, all over Seoul and Seongnam. And people are comfortable with it, for the most part, since the buses are stopped right in front of the school and drop you off in a general location near your house. But since this is an Econ class, we must study the economics of this entire situation. As the title states, we will be talking about the opportunity costs of riding a bus to school. What is Opportunity Cost?

Well if you don't know this by now, I'm wondering how you did on the AP exam. But just as a refresher, opportunity cost is simply the cost of passing up the next best choice when making a decision. Short and sweet huh?

Example:

You want a shirt and a baseball. Both a shirt and a baseball costs $5 each. You have $5. You buy the shirt. The opportunity cost is the baseball.



COSTS

So let's list the main "costs" to riding the school bus

1. Lots of money 2. Time that could be spent talking to friends 3. Lots of money 4. Time that could be spent sleeping 5. Lots of money 6. Time you could be doing something else more important



Now we need to evaluate these costs and see how they stand up to the alternative.

The Cost of Money:

As of now, it costs 2,100,000 won for a full year of busing. Now to some people that isn't a lot of money, but for others its a huge difference, especially with the amount we pay for the school in the first place.

But let us look at this price at an economic standpoint. People who take public transportation, especially those who live in Bundang, will on average spend 2000-4000 won per day, so let's average it to 3000. Multiply that by an average of 190 school days and you get 570,000 won. You save about 1,530,000 won, just by taking the public bus(taxi if you live close enough).

Now that amount of money can be used to buy a LOT of things. You've always been complaining that you don't have any money to buy that shirt? Want that game but don't have any money to spare? Well, this is opportunity cost. The money that you use to pay for your bus fare, takes away your ability to buy random stuff you want. If you manage to find friends who live near you and will carpool a taxi with you, you can even end up saving about 2,081,000 won.



The Cost of Time:

Time is money. It's worth a lot especially when you have that one project due in 2 hours that you completely forgot about. So you would want to savor every minute of that precious time would you not?

Unfortunately for you, the bus runs on a strict schedule, and leaves at 3:00, with or without you. Now because of that strict schedule, you lose out on the opportunity to: talk with your friends, talking to teachers about assignments, and working on projects during school. In the mornings, you lose the opportunity to sleep, and eat a healthy breakfast, especially since you have to get to the buses on time or be forced to get to school by yourself.

So taking the bus makes you lose out on the opportunity to do all the above things.

BENEFITS

But of course, to be fair, we will need to talk about the benefits you gain from riding the bus:

1. Its reliable 2. Its safe 3. You can blame the bus if you are late to school 4. You can learn to talk to people who live near you

Reliability and Safety:

School buses are of course reliable and safe. They belong to the school the students go to, and the parents always know how to contact the people who work there. Public transportation is sketchy to some and others refuse to ride it because they are afraid of being kidnapped.



Blaming the bus when you are late:

It's 8:15 and your stuck in traffic. Your friend is on the KIS bus next to you, and you are in your car. You both get to school at 8:30. He is excused while you are not. You see my point here.

You can learn to talk to people who live near you:

Socializing is important. Thus you should learn to talk to more people, especially those who live near you. After all, you don't want to be that one kid who sits in the back of the bus and no one wants to sit next to.

2 OTHER TOPICS RELATED TO KIS BUSES

Now because we have to relate this topic to 2 other economic topics, here are some other things about KIS buses.

They hold a monopoly over transportation (sort of):

A monopoly is when a specific individual or an enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it.

Sound familiar? Thought so. The buses in KIS have sufficient control over transportation from school to the area near your house. Of course, there is public transportation down the hill, but since students are often too lazy and consider that distance far, we will assume that KIS maintains control of the service. KIS maintains complete market power, is a single seller, has barriers to entry, and obviously gains excess profits. All these are the basis of a monopoly. But then again there are taxis that come up to the hill, which is why i labeled that they sort of are a monopoly.

Bus demand is inelastic:

Now because some parents are much too lazy to drive kids to work, or are "too busy" as some would say, their demand is pretty inelastic. No matter what the price, parents will usually maintain the same amount of demand for the service. It might also have something to do with the fact that they don't trust that their child can get home safely with public transportation. But nevertheless, bus demand remains inelastic.



CONCLUSION

Now for some of you, and by some i mean most of you, do not even care about the "costs" to riding the KIS bus. 2,100,000 won? That's chump change. Talking to friends and teachers? That's what the internet is for. But for those who care, look carefully at these costs. Understand them, and you can live a much more fulfilling and happy life(or at least save some money).

photo sources: http://www.boscovs.com/wcsstore/boscovs/images/store/product/images/022424683265344.jpg http://farm2.static.flickr.com/1425/1311527517_9a7fb91501.jpg http://www.duncanchannon.com/wp-content/uploads/2009/02/free-candy-van.jpg http://images.teamsugar.com/files/upl0/1/12981/02_2008/lazy1.jpg http://thingsifoundatthethriftstore.files.wordpress.com/2009/08/dollar-store-2.jpg