Why does making an economic choice involve opportunity cost

Answer 1

Making an economic choice involves opportunity cost because resources are limited and the choice to allocate resources towards one option means forgoing the opportunity to allocate those resources towards another option. Opportunity cost is defined as the value of the next best alternative that must be forgone in order to pursue a particular course of action. Therefore, when making an economic choice, one must consider the trade-offs and benefits associated with each option and analyze the opportunity costs involved. This allows individuals, businesses, and governments to make informed decisions about how to best allocate their limited resources to maximize their benefits.