Opportunity Cost

Opportunity Cost Definition

• Benefits you can receive, by taking an alternate action.

Example:
If a gardener decides to grow carrots, his or her opportunity cost is the alternative crop that might have been grown instead of the original product.

Example:
The opportunity cost of going to college is the money you would have earned if you had worked instead You hope to earn more during your career thanks to your education to offer the lost wages.

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Trade-offs:
Trade offs are all the alternatives that we give up whenever we choose one course of action over another.

Trade-Offs of Opp. Cost
Individual Trade offs- Choosing to spend more time at work, you give up watching a movie.