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Opportunity cost of your resource is defined as “the value associated with the next best use of that resource (which you must give up).” Decisions you make should reflect your opportunity cost, and not just your out-of-pocket costs. For example, if you decide to spend two hours of your time watching TV, the opportunity cost of your time is the value associated with its next best use (studying, sleeping, or another use).
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This assignment will help you understand one of the most important concepts in the study of economics – opportunity cost. It will also help you see how almost every decision in daily life involves opportunity cost.v