Opportunity cost is the cost of any activity measured in terms of the value of the next best alternative forgone (that is not chosen).
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- Only give up a thing when you want some other condition so much that the thing no longer has any attraction for you, or when it seems to interfere with that which is more greatly desired.
- Mohandas Gandhi, quoted in Gandhi: His Life and Message for the World by Louis Fischer.
- Because people face trade-offs, making decisions requires comparing the costs and benefits of alternative courses of action. In many cases, however, the cost of an action is not as obvious as it might first appear. […] The opportunity cost of an item is what you give up to get that item. When making any decision, decision makers should be aware of the opportunity costs that accompany each possible action. In fact, they usually are. College athletes who can earn millions if they drop out of school and play professional sports are well aware that their opportunity cost of college is very high. It is not surprising that they often decide that the benefit of a college education is not worth the cost.
- N. Gregory Mankiw, Principle of Economics (6th ed., 2012), Ch. 1. Ten Principles of Economics.
- There ain't no such thing as a free lunch.
- Variant: There's no such thing as a free lunch.
- Popular saying dating back to the 1930s; sometimes attributed to Milton Friedman.