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Meaning of opportunity cost?

In: Business Plans, Economics, Definitions and Word Differences [Edit categories]

Answer:

Opportunity cost is the measure of utility (personal satisfaction or pleasure that one derives from an action) that could have been earned or gained by choosing the alternative choice. For example, its Thursday night and your friends call you up and ask you if you want to see a movie that you really want to watch; you however have an economics test the next day that you really need to study for because you didn't really understand the unit. If you choose to go to the movies with your friends, the opportunity cost of that decision would be not gettting a good mark on your economics test. If you choose to study instead of going to the movies, the opportunity cost of that would be not being able to see that movie you wanted to watch and not being able to spend time with your friends.

First answer by Maraay. Last edit by Maraay. Contributor trust: 24 [recommend contributor ]. Question popularity: 2 [recommend question].

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Relevant answers:

How does cost differ from opportunity cost?
"cost" represents the money paid for something and "opportunity cost" is the value of the thing given up when one chooses something else.
Is opportunity cost a relevant cost?
yes, because it can be used in something more productive
How is cost differ from opportunity COST?
cost represents the money paid for something while opritunity cost is the value of one thing is when u give of something else,like cost is these shoes cos $228or these shoes cost $456 and the others...
Is an opportunity cost an opportunity lost?
Depends on how you look at it, yes and no.
What is opportunities cost?
The cost of passing up the next best choice when making a decision. For example, if an asset such as capital is used for one purpose, the opportunity cost is the value of the next best purpose the...