ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Opportunity cost is the value of the benefits of the foregone alternative, of the next best alternative that could have been chosen, but was not. Another way to look at it is that “choosing is refusing; ” one choice can only be accepted by refusing another.

Detailed explanation-2: -Every choice has an opportunity cost and opportunity costs affect the choices people make. The opportunity cost of any choice is the value of the best alternative that had to be forgone in making that choice.

Detailed explanation-3: -What is the simple definition of opportunity cost? Opportunity cost is the value of what you lose when choosing between two or more options. Every choice has trade-offs, and opportunity cost is the potential benefits you’ll miss out on by choosing one direction over another.

Detailed explanation-4: -Opportunity cost is the value of the best opportunity forgone in a particular choice. It is not simply the amount spent on that choice. The concepts of scarcity, choice, and opportunity cost are at the heart of economics. A good is scarce if the choice of one alternative requires that another be given up.

Detailed explanation-5: -If there is no opportunity cost in consuming a good, we can term it a free good. For example, if you breathe air, it doesn’t reduce the amount available to other people – there is no opportunity cost.