Teaching PowerPoints
1.1.3 Opportunity Cost (Edexcel A-Level Economics Teaching PowerPoint)
- Level:
- A-Level
- Board:
- Edexcel
Last updated 9 Oct 2023
This simple, editable powerpoint covers Theme 1 Micro and the concept of opportunity cost including the estimated costs for different procedures offered within the NHS.
Opportunity cost is a fundamental concept that refers to the value of the next best alternative forgone (given up) when a choice is made. It represents the benefits that could have been gained from choosing an alternative course of action but were given up in favour of the chosen option. In other words, it's the cost of not choosing the next best alternative.
Suppose you have £10,000 to invest, and you're considering two options: investing in stocks or putting the money into a savings account with a fixed interest rate.
If you choose the savings account, your opportunity cost would be the potential returns you could have earned from the stock market if you had chosen to invest in stocks.
Opportunity Cost: The potential capital gains or dividends that you miss out on by not investing in stocks.
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