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The essential thing to see in the concept of opportunity cost is found in the name of the concept.Opportunity cost is the value of the best opportunity forgone in a particular choice. The concepts of scarcity, choice, and opportunity cost are at the heart of economics.
That includes the value of the best alternative use of money spent for tuition, fees, and books.
But the most important cost of a college education is the value of the forgone alternative uses of time spent studying and attending class instead of using the time in some other endeavor.
But our wants, our desires for the things that we can produce with those resources, are unlimited.
We would always like more and better housing, more and better education—more and better of practically everything.
Students sacrifice that time in hopes of even greater earnings in the future or because they place a value on the opportunity to learn. Part of that cost is the value of the best alternative use of the money required to see the doctor.
What Are Economic Goods In Terms Of Economics
But the cost also includes the value of the best alternative use of the time required to see the doctor.
Air is a scarce good because it has alternative uses.
Not all goods, however, confront us with such choices.
The concept of opportunity cost must not be confused with the purchase price of an item.
Consider the cost of a college or university education.