Explian opportunity costs and give an example?

Question

Explian opportunity costs and give an example?

Answer 1

opportunity cost is the total amount of money you are capable of obtaining from the resources that you will be using.. and example is shoes...  lets say you are making a pair of leather shoes that you can sell for $60 u.s. dollars... from that leather you could have made a purse that you can sell for $100 u.s. dollars... or could have made  3 wallets that you could sell for $55.. the opportunity cost for that leather that you used would be the $100.. which is like the maximum profit that you could have made from that leather... hopefully i didn't confuse you even more :)

Answer 2

oppotunity costs are what you could have done instead of doing what you did. Say you are a lawyer who normally makes $500/hour. You could hire someone to paint your house for $1200 or spend only $300 and 8 hours painting it yourself. However the opportunity cost of 8 hours of lost wages is $4,000 so saving $900 is not really worth it. In effect choosing to paint the house yourself cost you $3,100 in lost opportunity costs.

Answer 3

The real cost of an item is it's 'opportunity cost' - what you must give up in order to get said item.

For example.

It is the last term before you graduate and your class schedule allows you to take only one elective. There are two, however that you would like to take, History and Beginning Tennis.

Supose you decide to take History, the opportunity cost of this is the enjoyment you would have derived from Beginning Tennis.

Opportunity cost is what you must forgo in order to get something.

In the end, all costs are opportunity costs.