ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Opportunity cost is the forgone benefit that would have been derived from an option not chosen. To properly evaluate opportunity costs, the costs and benefits of every option available must be considered and weighed against the others.

Detailed explanation-2: -“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: -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. It can also be explained as the loss of benefit due to a change in choice.

Detailed explanation-4: -The cost of the next best alternative foregone is termed as opportunity cost.

Detailed explanation-5: -Opportunity cost is defined as the value of the benefit that is sacrificed by choosing one particular alternative from many options. Opportunity cost is also known as transfer earning because an individual decides to work in a particular job rather than its next best alternative.