Eco - Opportunity cost

Definition off opportunity cost

-Opportunity cost is the loss of the next best alternative when making a decision

- Due to the problem of scarcity, choices have to be made about how to best allocate limited resources amongst competing wants and needs

- There is an opportunity cost in the allocation of resources, if you buy one thing you may not be able to purchase another thing.

Examiner def.

Opportunity cost is about the loss of the next best alternative. It is not a monetary amount. Money may well be a factor, but opportunity cost is about the loss of the next best choice when making a decision.