Opportunity cost is the cost that one incurs from not taking an action as compared to taking another action. Stock markets are a good example of this. Say you can invest in company A and company B. You invest for 6 months. Let's say you chose company A. Over those six months, company A's stock price goes up by $5 and company B's price goes up by $11. You made a profit of $5 per share. But your opportunity cost was $6 because you could have invested in company B and made $6 more. This is important because your money would have been more efficiently spent on company B (and economics is all about efficiency). Out of pocket costs are costs that you would directly incur for any given action. Back to the Stock Market example. Say your broker charges you $1 to buy a share in company A and $2 to invest in company B. Those costs are out of pocket.
One important point is that you may know what your opportunity costs are. In the stock market example you do not know what your opportunity costs are, but in many situations this is not the case.
Opportunity cost is the cost that an opportunity presents. The opportunity benefit is the benefit of the opportunity that is being presented.
Opportunity cost means that there is an opportunity to get something in a lower cost. __by Alondra Rico
Opportunity cost is something for the next porpose.
Yes, opportunity cost is a relevant cost because it can be used in something more productive.
Opportunity cost is what you give up in order to get something else. Paying money is the opportunity cost for ice cream for example.
Opportunity cost is the cost that an opportunity presents. The opportunity benefit is the benefit of the opportunity that is being presented.
Opportunity cost means that there is an opportunity to get something in a lower cost. __by Alondra Rico
A pocket knife can cost from $0.20-$1.000
Opportunity cost is something for the next porpose.
Yes, opportunity cost is a relevant cost because it can be used in something more productive.
Opportunity cost is what you give up in order to get something else. Paying money is the opportunity cost for ice cream for example.
Opportunity Cost can vary depending on what you are giving up exactly.
As we decide to choose more units of anything, the opportunity cost of each additional unit will rise. This means that the opportunity cost of the second unit will be greater than that of the first unit. The opportunity cost of the third unit will be greater than that of the second unit. And so forththe law of opportunity cost states that the more of a product that is produced,the greater is its opportunity cost,hence increasing marginal opportunity cost in simple terms refers to an extra or additional opportunity cost of foregoing other products to produce a unit of another product
Real cost is the price which is real not a fake price
Opportunity cost is fundamental in understanding the true economist cost (and thus profitability) of actions.
The opportunity cost of holding money is the nominal interest rate.
The scarcer the resourse the greater the opportunity cost