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Explain the term opportunity cost and give one example - Leaving Cert Economics - Question 4 - 2010
Question 4
Explain the term opportunity cost and give one example. Explanation: Example:
Worked Solution & Example Answer:Explain the term opportunity cost and give one example - Leaving Cert Economics - Question 4 - 2010
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Answer
Opportunity cost refers to the cost of foregone alternatives when a decision is made. Specifically, it is the value of the next best choice that is sacrificed in favor of the chosen option. In economic terms, this concept emphasizes that every choice has an associated cost, which is not always monetary but involves lost benefits or opportunities.
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Example:
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An example of opportunity cost can be illustrated by the decision to attend college. If you choose to enroll in college, the opportunity cost is the income you would have earned had you taken a job instead of pursuing your studies. This exemplifies the trade-off between education and immediate earnings.