Opportunity Cost Explained with Examples (Foundational Economics)

Opportunity cost is one of the most important concepts in economics. Economists will tell you it is the correct/true way to conceive of costs. In a nutshell, it is everything foregone. To make sure you correctly capture the opportunity cost of a decision, take time to assess the explicit and implicit cost.

Finally, why is there no such thing as a free lunch, because every decision has implicit costs. True, not every decision has explicit costs, but every decision results in something foregone (in fact, that's what makes a decision a decision). Therefore, it is true, there is no such thing as a free lunch.

This video is made for 1st year college students or AP/IB Economics students. It focuses on foundational economic concepts.

[michellebottex]

This actually broke down the concept of Opportunity Cost for me... all three examples are clear and to the point without adding too much!!! Great job!!!