study of opportunity cost

opportunity cost

• Opportunity cost is the value of what you have to give up in order to choose something else.
• Opportunity cost is the opportunity lost.
• The cost of sacrificing  one opportunity for another opportunity known as opportunity cost.

Example of opportunity cost

1) There is a farmer who wants to cultivate crops . He has two choices either he can produce rice for rupee 500 per kg or he can produce wheat for rupee 450 per kg.If he produces rice for rupee 500 per kg then he have to definitely leave production of wheat . Production of wheat for rupee 450 per kg is the opportunity cost for that farmer.

2) There is a person he has two choices either he can do a job in a company for rupee 50000 per month or he can teach in school for rupee 45000 per month. If he start doing job in a company for rupee 50000 per month then teaching in a school for rupee 45000 is a opportunity cost for that person.

3) A person have two choices for doing  job first job in company-A for rupee 50000 per month and second job in company-B for rupee 40000 per month.he chooses company-A for rupee  50000 then company-B for rupee 40000  is opportunity cost because he is sacrificing one opportunity for another opportunity .