Q.What is meant by Opportunity Cost?

Opportunity cost is one of the most fundamental and frequently tested ideas in the whole Std XI Economics course. …

Because resources are scarce, choosing to use them for one purpose means giving up the opportunity to use them for the next-best alternative purpose. This foregone alternative's value is called the opportunity cost, also known as the "real cost" of a decision, because it expresses cost in terms of what is sacrificed rather than only in money. Opportunity cost applies at every level: an individual choosing between studying for an exam and taking up a part-time job, a farmer choosing which crop to plant on a given field, a firm choosing which product line to expand, or a government choosing between building a highway and building a hospital with the same budget. On a Production Possibilit …

Students sometimes define opportunity cost simply as 'the cost of an opportunity' in money terms, missing that it specifically means …