2281 · 1.3
Opportunity cost — FAQ
Frequently asked questions for 2281 Opportunity cost. Direct answers first, then deeper explanation — then practise with marking.
Is the opportunity cost of a choice the total of everything else I could have done?
No. It is the single next best alternative. If you spend an evening revising, the opportunity cost is the one thing you would most have liked to do instead — not every activity you missed.
Does a free good have an opportunity cost?
No. A free good such as air is not scarce, so using it means giving nothing up. Goods made from scarce resources are economic goods and always carry an opportunity cost, even when they are handed out without charge.
Why does a government care about opportunity cost if it can borrow?
Borrowing does not remove the cost — it delays it. The money repaid with interest in future cannot then be spent on other services, so the opportunity cost is simply moved to later years.