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Opportunity Cost
What does it mean?
The difference in return between a chosen investment and one that is necessarily passed up.
In Other Words...
For example the opportunity cost of going to college is the money you would have earned if you worked instead. Or, if a gardener decides to grow carrots, his or her opportunity cost is the alternative crop that might have been grown instead (potatoes, tomatoes, coffee beans, etc.).
Related Links
Economics Basics Tutorial - Learn economics principles such as the relationship of supply and demand, elasticity, utility, and more!
Related Terms
Guns and Butter Curve | Scarcity
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