Opportunity Cost

All decision requires opportunity costs. An opportunity cost is what is sacrificed to implement an alternative action, i.e. what is given up to produce or obtain a particular good or service. For example, the opportunity cost of expanding a country's military arsenal is the decreases production of non military goods and services. Opportunity costs are found in every situation in which scarcity necessitates decision making.

Opportunity cost is the value-monetary or otherwise-of the next best alternative,or which is given up. This concept is used in both macroeconomics and microeconomics.