The notion of opportunity cost is central to the idea that the true cost of anything is the sum of all of the things that you have to give up in order to get the thing in question. To further understand this concept, let's consider a simply example.
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The word “opportunity” in “opportunity cost” is actually redundant. The cost of using something is already the value of the highest-valued alternative use. But as contract lawyers and airplane pilots know, redundancy can be a virtue.
http://www.econlib.org/library/Enc/OpportunityCost.html
In some cases, the notion of opportunity cost includes only these forgone alternatives, whereas in others the term opportunity cost refers to the total of this type of cost and more typical explicit monetary costs.
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Principle #2: The True Cost of Something Is Its Opportunity Cost i. Opportunity cost: what you must give up in order to get it ii. All costs are opportunity costs. Every choice you make means forgoing some other alternative. The opportunity cost of choosing A is what you lose by not taking B. iii.
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Money both can and cannot be a good indication of opportunity cost. c. Principle #3: “How Much” Is a Decision at the Margin i. When deciding “how much,” there is always a bene±t and a cost. ii. Trade-oF: comparison of costs with the bene±ts of doing something 1.1.
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When economists refer to the “opportunity cost” of a resource, they mean the value of the next-highest-valued alternative use of that resource. If, for example, you spend time and money going to a movie, you cannot spend that time at home reading a book, and you cannot spend the money on something else.
http://www.econlib.org/library/Enc/OpportunityCost.html
Updated August 01, 2016. Unlike most costs discussed in economics, an opportunity cost doesn't necessarily involve money. The opportunity cost of any action is simply the next best alternative to that action - or put more simply, What you would have done if you didn't make the choice that you did.
https://www.thoughtco.com/opportunity-cost-concept-overview-1147816
Suppose you could earn $20,000 per year at a job instead of going to college. This means that the true cost of a year of college is the tuition plus the opportunity cost of not working. The total tuition is the amount you pay ($4,000) plus the government subsidy ($8,000), which equals a total of $12,000.
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If the student could have earned $20,000 per year, then the true cost of the year’s schooling is $12,000 plus $20,000, for a total of $32,000. Of this $32,000 total, the student pays $24,000 ($4,000 in tuition plus $20,000 in forgone earnings).
http://www.econlib.org/library/Enc/OpportunityCost.html
Calculate the opportunity cost. The opportunity cost is the difference between the most lucrative option and the chosen option. In the above example, the most lucrative option is investing in the securities, which has a potential return of $12,000. The option the company chose, however, was to invest in new equipment, for a return of $10,000.
http://www.wikihow.com/Calculate-Opportunity-Cost
the true cost of something is opportunity costs
The notion of opportunity cost is central to the idea that the true cost of anything is the sum of all of the things that you have to give up in order to get the thing in question.