Clarifying (Opportunity) Costs
The American Economist, Forthcoming
9 Pages Posted: 8 Sep 2013 Last revised: 8 Nov 2014
Date Written: November 2014
Opportunity cost is considered to be a fundamental concept in economics. But the definition of the term continues to be controversial. I describe how the term is widely used in two distinct ways, both in the academic and non-academic literatures. I propose a practical way for educators to clarify the concept and related terminology.
Keywords: Opportunity cost, implicit cost, explicit cost, economic cost
JEL Classification: A22, A21
Suggested Citation: Suggested Citation