Why it matters
Time, money and attention are limited. A choice that looks free can still displace something valuable, so compare it with the best feasible alternative.
A worked example
You have two free hours. If you choose a £30 paid shift rather than your preferred study session, the opportunity cost includes the study you forgo—not just cash spent.
Illustrative example · simplified assumptionsA common mistake
Treating a free activity as having no cost.
Where the idea needs care
The next-best alternative depends on your circumstances; not every rejected option should be added together.
Apply the idea
Explain this concept using a different example from your spending, work, business or a policy debate. State what stays fixed and what could change the result.
Sources and further study
Examples and explanations by Alibomics. Numeric illustrations are not current market quotations.