Difference between revisions of "Opportunity cost"
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| − | + | In [[economics]], an '''opportunity cost''' is the value lost by choosing one alternative instead of another. It is the value of the sacrificed alternative in choosing something else. | |
| − | + | Beyond economics, the opportunity cost of [[atheism]] and other rejections of Christianity is the loss in the tremendous benefits of Christian [[faith]]. | |
| − | Opportunity cost is not recognized in calculating accounting cost and profits, but is recognized in calculating economic costs and profits. | + | Jesus first introduced the concept of opportunity cost. ''See'' [[Biblical_scientific_foreknowledge#Opportunity_cost|Biblical_scientific_foreknowledge - subheading Opportunity cost]]. |
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| + | == Economic Opportunity Cost == | ||
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| + | An example of this is doing a job that pays only $5 per hour when you could have taken a different job at $12 per hour has an opportunity cost of $7 per hour. Wasting three hours stuck in traffic has an opportunity cost of the money you could have been making for those three hours. | ||
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| + | It is not necessarily associated with a monetary cost, and can be applied to any decision of value. For example, a person could choose to eat pizza instead of a salad for lunch. Because they passed up the ''opportunity'' to eat a salad, the salad is an opportunity cost. | ||
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| + | Opportunity cost is not recognized in calculating [[accounting]] cost and profits, but is recognized in calculating [[economic]] costs and profits. Due to the concept of opportunity cost, it may be more economically advantageous to pass up opportunities that would seem profitable from an accounting standpoint. For instance, a famous basketball player might seem to save money by mowing his lawn himself instead of hiring somebody else to do it, but if this cost him the opportunity to make thousands of dollars by playing in a game that night, the opportunity cost of mowing his own lawn would be thousands of dollars. | ||
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| + | == Chess == | ||
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| + | In [[chess]], the opportunity cost of a weak move is the loss in [[tempo (chess)|tempo]] that results. Either side can be on the verge of [[checkmate]] and the side which loses a tempo falls to defeat. | ||
| + | [[Category:Economics]] | ||
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| + | == External links == | ||
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| + | *[https://www.econlib.org/library/Topics/College/opportunitycost.html Opportunity Cost], The Library of Economics and Liberty website | ||
| + | *[https://www.thebalancemoney.com/what-is-opportunity-cost-357200 What Is Opportunity Cost?], The Balance | ||
| + | *[https://www.investopedia.com/terms/o/opportunitycost.asp Opportunity Cost Formula, Calculation, and What It Can Tell You], Investopedia | ||
Latest revision as of 14:41, October 27, 2023
In economics, an opportunity cost is the value lost by choosing one alternative instead of another. It is the value of the sacrificed alternative in choosing something else.
Beyond economics, the opportunity cost of atheism and other rejections of Christianity is the loss in the tremendous benefits of Christian faith.
Jesus first introduced the concept of opportunity cost. See Biblical_scientific_foreknowledge - subheading Opportunity cost.
Economic Opportunity Cost
An example of this is doing a job that pays only $5 per hour when you could have taken a different job at $12 per hour has an opportunity cost of $7 per hour. Wasting three hours stuck in traffic has an opportunity cost of the money you could have been making for those three hours.
It is not necessarily associated with a monetary cost, and can be applied to any decision of value. For example, a person could choose to eat pizza instead of a salad for lunch. Because they passed up the opportunity to eat a salad, the salad is an opportunity cost.
Opportunity cost is not recognized in calculating accounting cost and profits, but is recognized in calculating economic costs and profits. Due to the concept of opportunity cost, it may be more economically advantageous to pass up opportunities that would seem profitable from an accounting standpoint. For instance, a famous basketball player might seem to save money by mowing his lawn himself instead of hiring somebody else to do it, but if this cost him the opportunity to make thousands of dollars by playing in a game that night, the opportunity cost of mowing his own lawn would be thousands of dollars.
Chess
In chess, the opportunity cost of a weak move is the loss in tempo that results. Either side can be on the verge of checkmate and the side which loses a tempo falls to defeat.
External links
- Opportunity Cost, The Library of Economics and Liberty website
- What Is Opportunity Cost?, The Balance
- Opportunity Cost Formula, Calculation, and What It Can Tell You, Investopedia