ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Saving builds wealth, enabling you to buy goods and services in the future-perhaps a car, a college education, a house, a vacation. The opportunity cost of saving is that saving leaves you with less money to use for buying goods and services today.

Detailed explanation-2: -A simple example of opportunity cost is to let us suppose that a person is having Rs. 50000 in his hand and He has the option to keep it with himself at home or deposit in the bank which will generate interest of 4% annually so now the opportunity cost of keeping money at home is Rs. 2000 per year as opposed to Bank.

Detailed explanation-3: -As an investor, opportunity cost means that your investment choices will always have immediate and future losses or gains. Alternative definition: Opportunity cost is the loss you take to make a gain, or the loss of one gain for another gain.

Detailed explanation-4: -What are the benefits and the opportunity cost of spending your income today? The benefit is that you will get anything you want. The opportunity cost is that you will have less money in the future.