What is opportunity cost in economics of education?

An opportunity cost is defined as the value of a forgone activity or alternative when another item or activity is chosen. For example, to define the costs of a college education, a student would probably include such costs as tuition, housing, and books.

Why is opportunity cost studied in economics?

As a representation of the relationship between scarcity and choice, the objective of opportunity cost is to ensure efficient use of scarce resources. It incorporates all associated costs of a decision, both explicit and implicit.

What is the link between scarcity and opportunity cost?

Opportunity cost is the consequence of scarcity. Economic choice is a conscious decision to use scarce resources in one manner rather than another. We have to forgo something in order to satisfy a want. Choice arises as a result of numerous human wants and the scarcity of the resources used in satisfying these wants.

What is opportunity cost in economics with example?

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.

What is a real life example of opportunity cost?

The opportunity cost is time spent studying and that money to spend on something else. A farmer chooses to plant wheat; the opportunity cost is planting a different crop, or an alternate use of the resources (land and farm equipment). A commuter takes the train to work instead of driving.

What is opportunity cost give an example?

What is opportunity cost and example?

What is the best definition of opportunity cost?

Opportunity cost is the forgone benefit that would have been derived by 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.