Opportunity Cost

• Opportunity cost is what an individual gives up in order to satisfy a need or want
• An opportunity cost is defined as the best alternative foregone (GIVEN UP)
• For example - Jack got a part time job helping at a local cafe. With his first pay cheque of $100, he had to decide whether to purchase a new video game or to put the money towards buying a car when he left school. After much thought he decided to put the money towards a car.

  His opportunity cost of doing this was the purchase of a video game