Opportunity cost influences decisionmaking from "summary" of Principles of Economics by Saifedean Ammous
Opportunity cost is a fundamental concept in economics that plays a crucial role in decision-making. It refers to the value of the next best alternative that is forgone when a choice is made. Every decision involves trade-offs because choosing one option means giving up another. Understanding opportunity cost is essential because it helps individuals and businesses evaluate the consequences of their choices. When making decisions, individuals must consider not only the benefits of their choice but also what they are sacrificing by choosing that option. For example, if a person decides to spend money on a new smartphone, they are not only gaining a new device but also giving up the...
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