---
title: What is Opportunity Cost?
disqus: pierodibello
---

###### tags: `economics`

## Basic laws

1. **Scarcity** exists => resource are scarse => people must always make choices.
2. Because of scarcity, we must make CHOICES! _(economics deals with scarcity)_
3. Every choice we make has an opportunity cost, has possible options and comes with **trade-offs**.

## The Opportunity Cost

E.g. we all have the same amount of hours in a day, but we make different decisions on how to spend our time / choose to buy

=> every time you make a choice, there's a value you put on that choice

### Every choice has a value to you!

**Opportunity cost of a choice** = what you gave up to get it = the value of the opportunity lost.

**Value** has 2 parts:

* benefits
* cost

Looking at choices in terms of **BENEFITS** and **COSTS** helps you make better economic decisions.

You should choose the option with the greatest benefit to you and with the lowest cost.

The **opportunity cost** is the value of the choice we could have had and did not.

#### Resources

* https://www.youtube.com/watch?v=Um0yvrvY0Y8
* https://www.youtube.com/watch?v=NwOYLV-L7pc