Opportunity Cost

In micro-economimic theory, Opportunity Cost is a value ,not a benefit of the choice of the best alternative cost while making a decision. A choice needs to be made between mutually exclusive alternatives. Opportunity cost is the cost not enjoyed by taking the second best alternative while making a decision. It is the key concept in economics and is described to express the basic distinction between scarcity and choice. Since people must choose , they inevitably face trade-offs in which they have to give up things they desire in order to get what they desire more. For example , people could provide universal healthcare for all but the opportunity cost of such a decision could lead to less housing, environmental protection and national defence.