Opportunity cost

Type: Concept

As of November 2026, Opportunity cost has been mentioned in one podcast episode on The Ramsey Show (Nov 2026). Used repeatedly to explain tradeoffs (e.g., buying a car vs investing for future growth).

In microeconomic theory, the opportunity cost of a choice is the value of the best alternative forgone where, given limited resources, a choice needs to be made between several mutually exclusive alternatives. Assuming the best choice is made, it is the "cost" incurred by not enjoying the benefit that would have been had if the second best available choice had been taken instead. The New Oxford American Dictionary defines it as "the loss of potential gain from other alternatives when one alterna