Opportunity cost arises because resources are limited compared to wants. At an individual level, if a person spends money on a trip abroad, they forgo spending that money on something else like a new car. Individuals also face opportunity costs of time - working overtime means less leisure time. For local governments, building a leisure center incurs an opportunity cost as those funds could have been used to help citizens, and raising taxes to pay for it means taxpayers give up other goods due to higher taxes. Overall, opportunity cost refers to the best alternative use of resources that must be forgone to obtain or produce a particular good or service.

1. Opportunity cost and tourism:
Since resources can be used in different
ways to make different goods and services,
and since they are limited in relation to
wants, the concept of opportunity cost arises.
This can be viewed at different levels.

2. At the individual level
Consumers have limited income.
So if they spend their income on a trip
abroad, they can consider what else they
could have bought with the money, such as
a new car.
Individuals also have limited time. If an
individual decides to work extra overtime,
leisure time must be given up.

3. At a local or national
government level
The same choices can be analyzed.
Local councils have limited budgets.
If they decide to build a leisure center, that
money could have been used to provide
more home help to poor citizens.
Even if they raised local taxes to build the
new leisure center there would be an
opportunity cost, since the taxpayers would
have to give up something in order to pay
the extra taxes.

4. Opportunity cost
can be defined as :
“ the alternatives or other opportunities
that have to be foregone to achieve a
particular thing”.