Opportunity Cost (1)

Opportunity cost is the value of alternative foregone in order to have something else. This value is unique for each individual. You may, for instance, forgo ice cream in order to have mashed potatoes. For you, the mashed potatoes have a greater value than dessert. But you can always change your mind in the future because there may be some instances when the mashed potatoes are just not as attractive as the ice cream. The opportunity cost of an individual’s decisions, therefore, is determined by his or her needs, wants, time and resources (income).