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Illustration of Opportunity Cost (Making Choices)

Opportunity Cost (Making Choices)

Opportunity cost is a core concept in economics that represents the potential benefits an individual…

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The story

The Helper Called Opportunity Cost

Hello. Have you ever wanted to build a big, tall block tower and also paint a swirly, whirly rainbow picture, both at the very same time. It’s hard to pick just one, isn’t it. When you choose the colorful blocks, I am the beautiful painting you didn't get to make. When you choose your bright paints, I am the fun tower you didn't get to build. I am the little bit of fun you miss out on when you pick something else.

I don't have a body, but I have been around forever and ever. A long, long time ago, people knew me when they chose to gather yummy berries instead of going fishing for wiggly fish. They couldn't do both at the same time. For many, many years, I didn't have a name. Then, a little over 100 years ago, around the year 1914, some smart grown-ups gave me a special name. They called me Opportunity Cost. That sounds like a big name, but it just means the ‘opportunity,’ or chance, you give up when you make a choice. Choosing one fun thing means you can't do the other fun thing right then.

But don't worry, I am not here to make you feel sad. I am actually your helper. I help you think about what you really, really want the most. When you choose to eat a crunchy, red apple, you know that eating the apple is more important to you right now than eating a sweet, yellow banana. I help you see what makes you happy. Every time you pick something, you are practicing being a great decider. I am so proud to help you fill your day with your very favorite choices.

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About

Opportunity cost is a core concept in economics that represents the potential benefits an individual, investor, or business misses out on when choosing one alternative over another.

Concept Articulated by Benjamin Franklin 1748 CE
Term 'Opportunity Cost' Coined 1914 CE

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Opportunity Cost (Making Choices)
The Helper Called Opportunity Cost 0:00 / 0:00