Question

Consider "opportunity cost". Whether something is "worth it" is not just a measure of monetary amounts, but the cost in time, well-being, etc. Think about a decision you have made and discuss the opportunity costs: for example, continuing your education, taking this class, buying a car, etc. How do you evaluate the value of the choice you made?

Answer 1

Opportunity cost refers to the next best cost. Resources are limited and they have alternative uses. Hence there comes the notion of making choice. So while making a decision one needs to consider the cost of the nect best alternative that one has to forego. For instance, going for higher education makes one to let go off a job opportunity. Thus the wages forgone for getting the higher education is the opportunity cost of getting higher education. The higher value of the opportunity cost shows the higher value of a good or service to a consumer.