The total cost of any choice we make—buying a car, producing a computer, or even reading a book—is everything we must give up when we take that action. This cost is called the opportunity cost of the action, because we give up the opportunity to have other desirable things.
Opportunity cost The value of The opportunity cost of any choice is all that we forego when we make that the best alternative sacrificed choice.
when taking an action.
Opportunity cost is the most accurate and complete concept of cost—the one we should use when making our own decisions or analyzing the decisions of others.
Is college worth the opportunity cost for you? Find out by trying Professor Jane Leuthold's COLLEGE CHOICE program at http://www.cba.uiuc.edu/college/ econ/choice/choice.html.
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