Thursday, August 21, 2003 :::
 

An opportunity cost can be loosely defined as what is given up when one decision is made over another.

These costs reflect the trade-offs made by an individual or a group when pursuing one course of action. It is assumed that rational human beings take into account opportunity costs when making decisions. To reflect the full cost of a specific choice, it is necessary to include the cost of what is given up by not choosing an alternate course of action.

Due to the scarcity or limited amount of all resources, such as time, it is necessary to include opportunity costs into rational decision-making.

If the concept of scarcity did not exist, individuals would have no restrictions on any decision, and thus there would be no regard given to missed opportunities

::: posted by Mega at 8:19 AM

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Mega means big or large stir because I like to mix it up