Question

what is an opportunity cost? Give an example. Do opportunity costs only occur when people make spending decisions? why or why not.(write like an 8th grader)

( 2 sentences)

Answer 1

Opportunity cost is the value of what you give up when you make a choice. For example, if you spend your allowance on a new video game instead of saving it for a concert, the opportunity cost is the fun you miss out on at the concert. Opportunity costs can happen with any decision, not just spending money, because every choice means you can't do something else that could be valuable or enjoyable.