ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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. Resources are limited but wants are unlimited, thus choices must be made.

Detailed explanation-2: -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-3: -OPPORTUNITY COST: The next best alternative given up when making a financial choice.

Detailed explanation-4: -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-5: -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.