Sterling Terrell

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You are here: Home / Potpourri / Economics 101: Opportunity Cost

Economics 101: Opportunity Cost

Economics 101: Opportunity Cost

[This is part of the series: The Complete Guide To Economics 101.]

In economics, one of the fundamental facts behind scarcity is the fact that people face trade-offs.

This boils down the simple fact that: There is a cost for everything.

Or, said differently: “There is no free lunch.”

Opportunity costs are whatever you give up in order to get something.

  • The opportunity cost of college was 4 years of lost full-time income.
  • The opportunity cost of volunteering on Saturday morning is that I can’t take my daughter swimming on Saturday morning.
  • The opportunity costs of writing this post is time not spent with my wife watching TV – or time that I can never read.
  • And the opportunity cost of producing product X is that you cannot produce product Y.
 The point is that for everything you do, there is a cost.

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Filed Under: PotpourriTagged With: #Economics101

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