How does the concept of opportunity cost help you make better decisions?
Answer (1)
Opportunity cost is the value of the next best thing you give up when you make a choice. This helps us think about what we’re sacrificing. For instance, if I spend my Saturday watching Netflix instead of reviewing for an exam, my opportunity cost is the higher grade I could have earned. In another example, a sari-sari store owner choosing to sell snacks instead of toiletries must think about which items will bring more profit. Understanding opportunity cost teaches us to think before deciding, especially when our time or money is limited.
