ABSTRACT
No.matter.what.the.risk.management.issue.is,.someone.is.always.going.to.care.about. costs..Whether.the.problem.falls.in.the.realm.of.public.health,.public.safety,.profitability,.or.anything.else,.costs.matter..This.chapter*.explains.why.costs,.or.opportunity. costs. as. economists. tend. to. think. about. them,. should.matter. to. everyone.. Because.costs.matter,.it.is.essential.that.all.risk.managers.have.some.basic.understanding. of. a. few. economic. principles.. These. include. scarcity,. opportunity. cost,. valuation,.and.marginal.analysis..Each.is.addressed.in.this.chapter..The.chapter.concludes.by.considering.the.difficult.and.subjective.business.of.identifying.and.making. trade-offs.and.the.economic.analysis.techniques.used.to.support.those.decisions.
