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What exactly is opportunity cost? When you hear the word “opportunity cost” you are really just hearing a fancy term for the word “trade-off.” Every time you make a choice, there is a trade-off to ponder. You must analyze what you are gaining as well as what you may be giving up. To put it simply, opportunity cost is the price of the next best thing you could have done had you not made your first choice.

Opportunity cost is part of the Ten Principles of Economic in analyzing how people make decisions. A way to break this down is by referring is as explicit and implicit.

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