This statement, however, comes with certain provisios. We may be willing to pay for these resources. Scarcity helps us to understand the idea that resources are limited and we cannot have everything that we want. Given our limited resources, we must make choices about where our resources should go. Every choice we make, then, involves a cost.
Opportunity Cost is the value of the next best alternative that is given up.
Examples are choosing to go to the movies instead of going out to dinner, voting in elections, studying for an exam versus going out with friends, or going to college instead of woring full time. Every decision we make means sacrificing some other option. For example, going out to a movie on a Friday night may mean that the dinner at a restaurant has to be sacrificed due to lack of funds for both. The opportunity cost of the movie is the dinner given up. The full cost is not just the tuition.