Opportunity Cost (AS/A LEVELS/IB/IAL)
Opportunity Cost (AS/A LEVELS/IB/IAL)
Courses Info
Level: AS Levels, A Level, GCSE – Exam Boards: Edexcel, AQA, OCR, WJEC, IB, Eduqas – Economics Revision Notes
Opportunity Cost
Opportunity cost refers to the value (cost) of the next best alternative forgone (given up).
Opportunity cost is to do with making choices.
Government, producers and consumers all face choices.
- E.g. A consumer could be faced with the choice of spending £10 on buying some food or buying a revision book for economics.
- If the student chooses to buy some food he is unable to buy the economics revision book. However if the consumer chooses to buy the revision book he will have to forego (give up) buying some food.
Exam Tip:
The best way to show opportunity cost in your exam is with the use of a ‘Production Possibility Frontier Curve’ (PPF).
