Every choice involves a trade-off where you must give up something to get something else. The best alternative given up is called the opportunity cost, which is the cost of a decision in terms of the forgone best alternative. For example, the opportunity cost of going to college is the money that could have been earned working instead, and the opportunity cost of a gardener growing carrots is the other crops that could have been grown instead, such as tomatoes or potatoes.

1. Opportunity Cost

2. Understanding Opportunity Cost
We make choices every day because we have limited
resources, but so many wants. We therefore have to
decide which wants we will satisfy, and those we will not.
Every choice involves a trade-off, you must give up
something if you want to get something. Whatever you
give up is called an opportunity cost.

3. What is Opportunity Cost?
Opportunity cost is the
cost of a decision in
terms of the best
alternative given up
in order to achieve it.
It is the best alternative
forgone.

5. Examples:
1)The opportunity cost of going to college is the money you would have
earned if you worked instead.
2)The opportunity cost of a gardener growing carrots would be what he would
have grown instead (tomatoes, potatoes, celery, etc.)

6. If I offer to give you something for nothing, is
there a cost?

7. Why did you chose your 1st choice?
What the the opportunity cost of your decision?
Why was that your opportunity cost?