What is the best way to describe opportunity cost?

What is the best way to describe opportunity cost?

Opportunity costs represent the potential benefits an individual, investor, or business misses out on when choosing one alternative over another. Because opportunity costs are, by definition, unseen, they can be easily overlooked.

What is opportunity cost easy words?

Opportunity cost is the value of the next best thing you give up whenever you make a decision. It is “the loss of potential gain from other alternatives when one alternative is chosen”. For example, opportunity cost is how much leisure time we give up to work.

What does the opportunity cost means explain with a numerical example?

What is opportunity cost? Explain with the help of a numerical example. An opportunity cost is the cost of an alternative that must be forgone in order to pursue a certain action. However if company’s return is only 3% when we could have made a return of 9% from FD, then our opportunity cost is (9% – 3% = 6%).

Which is the best example of opportunity cost Brainly?

Answer: The opportunity cost of taking a vacation instead of spending the money on a new car is not getting a new car. When the government spends $15 billion on interest for the national debt, the opportunity cost is the programs the money might have been spent on, like education or healthcare.

What is opportunity cost explain with example?

When 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 can’t spend the money on something else.

What is opportunity cost explain with the help of numerical example?

What is imputed cost with example?

For example, if an individual decided to go to graduate school instead of working at a job, the imputed cost would be the salary they gave up during the time they are at school. Imputed costs are usually incorporated when calculating economic costs. Economic costs would be both imputed costs and explicit costs.

What is an opportunity cost example kids?

Opportunity cost is the value of the next best thing you give up whenever you make a decision. For example, opportunity cost is how much leisure time we give up to work. Because leisure and income are both valued, we have to decide whether to work, or do what we want.