Explain the concept of opportunity cost and give 3 examples of it.
Opportunity cost means the second best choice that is given up. This is due to the shortage of products and resources hence unable to satisfy all of our wants. Therefore we must choose the best choice and give up the other. The first example would be the government choosing between building roads and building hospitals. The second example is choosing between two locations for a new factory. The third example would be a business considering labor intensive or capital intensive.