Opportunity Costs

In your own words, explain what economists mean when they talk about opportunity costs. What are opportunity costs? Give some examples. And give some examples from your own life.

Every choice is an opportunity cost: if you choose one alternative, you'll lost out on another. An economist would throw you the definition: "Opportunity cost is the loss of potential gain from the best alternative to any choice."

If I should go to college after high school, I would be losing $20,000 to tuition. On the otherhand, I can spend those four years working to make $20,000. Likewise, earning a bachelors degree provides the average student with $590,000 in future earnings. There are plenty of alternatives, but the opportunity cost is what we pay to get what we want in exchange for another.