ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Opportunity cost is commonly defined as the next best alternative. Also, known as the alternative cost, it is the loss of gain which could have been gained if another alternative was chosen.

Detailed explanation-2: -How is opportunity cost defined in everyday life? “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. Louis Fed, in a recent Page One Economics: Money and Missed Opportunities.

Detailed explanation-3: -Implicit costs (also referred to as implied, imputed or notional costs) are the opportunity costs of utilising resources owned by the firm that could be used for other purposes.

Detailed explanation-4: -Opportunity Cost is a part of the Economic Cost.

Detailed explanation-5: -In economics, opportunity cost represents the potential gain that is lost when choosing one investment choice over another.