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Importance of Opportunity Cost

[Summary]What is an opportunity cost? definition and meaning Opportunity costs are fundamental costs in economics, and are used in computing cost benefit analysis of a project. Such costs, however, are not recorded in the account books but are recognized in d

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What is an opportunity cost? definition and meaning

Opportunity costs are fundamental costs in economics, and are used in computing cost benefit analysis of a project. Such costs, however, are not recorded in the account books but are recognized in decision making by computing the cash outlays and their resulting profit or loss.

What is an opportunity cost? definition and meaning

Importance of Opportunity Cost

Definition of opportunity cost: The cost of passing up the next best choice when making a decision. For example, if an asset such as capital is used for...

Opportunity Cost facts, information, pictures | Encyclopedia.com articles about Opportunity Cost

Opportunity Cost

An opportunity cost is defined as the value of a forgone activity or alternative when another item or activity is chosen. Opportunity cost comes into play in any decision that involves a tradeoff between two or more options. It is expressed as the relative cost of one alternative in terms of the next-best alternative. Opportunity cost is an important economic concept that finds application in a wide range of business decisions.

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Higher education is perceived as extremely important, and for most people a college education has become the necessary admission ticket to good jobs and a middle-class lifestyle. Parents of high school students place especially high importance on a college education, and African American and Hispanic parents give college an even higher priority than do white parents. All groups believe that the country should ensure that no qualified and motivated student is excluded from a college education because of the cost.

Importance of College Education

Importance of Opportunity Cost
During their high school career, students may begin to question the importance of a college education. They might find themselves asking, “Why is it important to go to college?” The answer is that, more than ever, attending college provides opportunities for graduates which are not as widespread to those who have not received a higher education.

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