Opportunity cost is an economics term that refers to the value of what you have to give up in order to choose something else. In a nutshell, it’s a value of the road not taken. Weigh All Your Options

Opportunity cost is the value of something when a particular course of action is chosen. Simply put, the opportunity cost is what you must forgo in order to get something. The benefit or value that was given up can refer to decisions in your personal life, in a company, in the economy, in the environment, or on a governmental level. What is an Opportunity Cost? The value of the best alternative to a decision. opportunity cost A benefit, profit, or value of something that must be given up to acquire or achieve something else. Since every resource (land, money, time, etc.) can be put to alternative uses, every action, choice, or decision has an associated opportunity cost. Jun 12, 2019 · The Opportunity Cost is referred to the probable returns from the use of resources that are considered as a second-best option. This is the reason why it is also known as Alternative Cost. When a person has to give up a little in order to buy something else is called Opportunity Cost. Suppose, opportunity cost of 1 table is 3 chairs and the price of a chair is $100, while the price of a table is $400. Under such circumstances, it is beneficial to produce one table rather than 3 chairs. Definition The cost of passing up the next best choice when making a decision. For example, if an asset such as capital is used for one purpose, the opportunity cost is the value of the next best purpose the asset could have been used for.

Opportunity Cost of Capital The difference in return between an investment one makes and another that one chose not to make. This may occur in securities trading or in other decisions. For example, if a person has $10,000 to invest and must choose between Stock A and Stock B, the opportunity cost is the difference in their returns.

Jun 16, 2020 · Opportunity cost is the comparison of one economic choice to the next best choice. These comparisons often arise in finance and economics when trying to decide between investment options. The opportunity cost attempts to quantify the impact of choosing one investment over another. Opportunity cost definition is - the added cost of using resources (as for production or speculative investment) that is the difference between the actual value resulting from such use and that of an alternative (such as another use of the same resources or an investment of equal risk but greater return).

Opportunity cost measures the cost of a choice made in terms of the next best alternative foregone or sacrificed. Examples of Opportunity Cost in the Business & Economic Environment. Work-leisure choices. The opportunity cost of deciding not to work an extra ten hours a week is the lost wages given up. Government spending priorities

W hen economists refer to the “opportunity cost” of a resource, they mean the value of the next-highest-valued alternative use of that resource. If, for example, you spend time and money going to a movie, you cannot spend that time at home reading a book, and you cannot spend the money on something else.