Opportunity Cost and Trade-offs
You are already familiar with the concepts of scarcity, choices, and incentives. Opportunity cost is one of the most valuable economic concepts: it is the value of the next best alternative. For instance, consider the value of your next best alternative to reading this unit. What would you be doing if you were not reading this unit? Your response will vary depending on age, socio-cultural background, family structure, and other factors.
Watch this video on opportunity costs and trade-offs. Opportunity cost
and trade-offs are two fundamental economic concepts. They are all
around us. Trade-offs arise from scarcity and choice. For instance, you
face a trade-off when you decide between reading this unit or cooking
dinner.
Source: MRU, https://mru.org/courses/principles-economics-microeconomics/opportunity-cost-and-trade-offs
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