0
The concept of opportunity cost is based on the notion that for every action you take or decision you make, you are losing the benefits of other options. Opportunity cost is that benefit of an opportunity that you lose by choosing some other opportunity.
Wiki User
∙ 9y ago
Wiki User
∙ 15y agoOpportunity cost is the measure of utility (personal satisfaction or pleasure that one derives from an action) that could have been earned or gained by choosing the alternative choice. For example, its Thursday night and your friends call you up and ask you if you want to see a movie that you really want to watch; you however have an economics test the next day that you really need to study for because you didn't really understand the unit. If you choose to go to the movies with your friends, the opportunity cost of that decision would be not gettting a good mark on your economics test. If you choose to study instead of going to the movies, the opportunity cost of that would be not being able to see that movie you wanted to watch and not being able to spend time with your friends.
Wiki User
∙ 12y agoThis is a two part answer. the second part is more in depth..(.first),The cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action. (second) The difference in return between a chosen investment and one that is necessarily passed up. Say you invest in a stock and it returns a paltry 2% over the year. In placing your money in the stock, you gave up the opportunity of another investment - say, a risk-free government bond yielding 6%. In this situation, your opportunity costs are 4% (6% - 2%).
Wiki User
∙ 10y agoWhen Mutual exclusive decision is to be made or projects to be selected, the benefit which is left due to selection of one project instead of other project is the 'Opportunity Cost' for selecting one project over other.
Example:
Project 1 benefit = 100000
Project 2 benefit = 200000
Opportunity cost for project 1 = 200000
Opportunity cost for project 2 = 100000
Wiki User
∙ 13y agoOpportunity cost refers to the economic benefit forgone by using a resource for one purpose rather than another.
Add your answer:
Earn +20 pts
What is the meaning of opportunity lost?
In the economical term opportunity cost means the best next alternative forgone
What is opportunity cost and opportunity benefit?
Opportunity cost is the cost that an opportunity presents. The opportunity benefit is the benefit of the opportunity that is being presented.
What does the word opportunity cost means?
Opportunity cost means that there is an opportunity to get something in a lower cost. __by Alondra Rico
What calculates the opportunity cost?
Opportunity cost is something for the next porpose.
Is opportunity cost a relevant cost?
Yes, opportunity cost is a relevant cost because it can be used in something more productive.
What is the meaning of opportunity lost?
In the economical term opportunity cost means the best next alternative forgone
What is opportunity cost and opportunity benefit?
Opportunity cost is the cost that an opportunity presents. The opportunity benefit is the benefit of the opportunity that is being presented.
What does the word opportunity cost means?
Opportunity cost means that there is an opportunity to get something in a lower cost. __by Alondra Rico
What calculates the opportunity cost?
Opportunity cost is something for the next porpose.
What is the meaning of opportunity?
Opportunity refers to a favorable circumstance or chance that allows for potential success or advancement. It signifies a situation where one can take advantage of to achieve a goal or seize an advantage.
Is opportunity cost a relevant cost?
Yes, opportunity cost is a relevant cost because it can be used in something more productive.
What do you understand by the term opportunity cost?
Opportunity cost is what you give up in order to get something else. Paying money is the opportunity cost for ice cream for example.
Why does opportunity cost vary?
Opportunity Cost can vary depending on what you are giving up exactly.
What does increasing marginal opportunity cost mean?
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
What is the difference between constant opportunity cost and increasing opportunity cost?
Real cost is the price which is real not a fake price
Why do you need to understand Opportunity cost?
Opportunity cost is fundamental in understanding the true economist cost (and thus profitability) of actions.
Opportunity cost of holding money?
The opportunity cost of holding money is the nominal interest rate.
