Opportunity Cost

575 Words2 Pages

Opportunity cost the loss of possible profit from other substitutes when another substitute is selected. Opportunity cost applies to the options we have, so concerning the necessities of life and what we desire. Humans require certain necessities to live like food, water, and shelter, but things like gaming systems or expensive jewelry are the materialistic things we still longing for. Nowadays it is uncommon for people to save until they retire and not spend any money within that time for their own personal use, so then we are expected to indulge once in a while. On occasion and not within budgeting extremes treating yourself and your family is called for. Opportunity cost is utilized to comprehend the practical use of what is purchased versus …show more content…

It directly relates to understanding how opportunity is a loss or gains dependent on the situation and choices you have. Within the articles is gives an example of how opportunity cost is a basic projection of financial loss or financial gain. The scarcity of resources results in people using opportunity cost more than if the economy was in a surplus. Usually, the opportunity cost is between two or more options and you try to make the best decision to get the best result. However, it is unknown if the other alternatives would have been a suitable pick only until after you have taken the option, thus the concept of opportunity cost is in …show more content…

Being smart with money will help me better invest in my future and help me save what I need. If I am successfully enough, teaching others around me and my younger peers will allow for a generation of economic decision making people. The concept of opportunity cost teaches you to think about the choices you have. Opportunity cost will help me when I have the choice between saving for retirement versus buying a new set of

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Opportunity Cost

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