IntroductionOpportunity cost refers to what you have to give up to buy what you want in terms of other goods or services. When economists use the word “cost,” we usually mean opportunity cost.
Definitions and BasicsOpportunity Cost, from the Concise Encyclopedia of Economics
Getting the Most Out of Life: The Concept of Opportunity Cost, by Russ Roberts on Econlib
Opportunity Cost, a LearnLiberty video.
Opportunities and Costs, by Dwight Lee. The Freeman.
In the News and ExamplesOpportunity cost, rock concerts, and grades: A Fable of the OC, by Mike Munger on Econlib.
Biggest cost of college is what students could otherwise earn by working. See Human Capital Gary Becker, Concise Encyclopedia of Economics
Opportunity cost, movies, and reading:
Opportunity cost and TANSTAAFL: Chris Anderson on Free. EconTalk podcast episode, May 12, 2008. Specifically, explanation of the economic meaning of “There ain’t no such thing as a free lunch,” starting at time mark 47:11.:
How not to calculate opportunity cost–thinking of only similar goods: What is Opportunity Cost? by David Henderson. EconLog, July 26, 2011.
How not to calculate opportunity cost–double counting: War Economics by Arnold Kling. EconLog, March 7, 2003.
Opportunity cost and crowding out of public projects. Public funding of public works projects is at the expense of other alternative, forgone, and equally worthy projects and goals. See: “The Seen and the Unseen: The Costly Mistake of Ignoring Opportunity Cost”, by Anthony de Jasay.
Opportunity Cost and Hidden Inventions, by Dwight Lee. PDF file at CommonSenseEconomics.com. First published in The Freeman
Ticket Scalping and Opportunity Cost. EconTalk podcast, April 10, 2006.
A Little History: Primary Sources and ReferencesEarly use of the term “opportunity cost”: The Theory of Choice and of Exchange, by Frank Knight. Part II, Chapter 3 in Risk, Uncertainty, and Profit
Advanced ResourcesChapter 1. L.S.E. Cost Theory in Retrospect, by James M. Buchanan and George F. Thirlby. L.S.E. Essays on Cost
Related TopicsCost-Benefit Analysis The 15 minutes between the end of the second quarter and start of the third are a carefully choreographed production, featuring clips of game footage, wardrobe changes and managerial strategies straight out of business school. Coach Steve Kerr, based on interviews with players and coaches, has worked to create an envir...
by Pierre Lemieux If creating jobs made a country great, North Korea would be very great... Other things being equal, less unemployment is better than more. I am of course speaking of involuntary unemployment at the going wage rate. It is preferable to be unemployed if one prefers that and can afford it. It i...
Here's the Economist: JOHN KENNETH GALBRAITH, a quotable economist, observed that one of the deeper mysteries is why, in a falling market, there is still a buyer for every seller. It is a conundrum that bond investors must now contemplate. Since January the yield on a ten-year Treasury bond has risen (and thus bond pr... |