What is Opportunity Cost?
You make many choices every day. You choose how to spend your time. You choose how to spend your energy. You also choose how to spend your money.
Did you know that every choice you make has an opportunity cost?
An opportunity cost is the value of the options you didn’t choose.
For example, let’s say you spend $20 on a new book. You could have spent that $20 on many other things. You could have bought a poster for your room or a meal at a restaurant. Reading has more value to you than a poster or a fancy meal, so you bought the book instead. As a result, your bedroom wall will stay blank and you will eat at home. The opportunity cost of buying the book is a blank wall and leftovers for dinner. To you, the new book is worth the opportunity cost.
Questions:
What was the opportunity cost of your choice
People earn an income when they are hired by an employer to work at a job. Income is earned as a wage, a salary or a sales commission.
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