ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -“Opportunity cost is the value of the next-best alternative when a decision is made; it’s what is given up, ” explains Andrea Caceres-Santamaria, senior economic education specialist at the St.

Detailed explanation-2: -“Opportunity Cost is the value of the next best alternative choice you could have made instead of the actual choice you made.” The concept of “value” is somewhat arbitrary because economists do not necessarily measure it only with money.

Detailed explanation-3: -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.

Detailed explanation-4: -Opportunity cost is defined as the cost of the next best alternative foregone. It represents the sacrifices that people must make due to the scarcity of resources.

Detailed explanation-5: -Opportunity costs represent the potential benefits that an individual, investor, or business misses out on when choosing one alternative over another.