Joe sold gold coins for $1,000 that he bought a year ago for $1,000. He says, "At least I didn't lose any money on my financial investment." His economist friend points out that in effect he did lose money because he could have received a 3 percent return on the $1,000 if he had bought a bank certificate of deposit instead of the coins. The economist's analysis in this case incorporates the idea of
- opportunity costs
- marginal benefits that exceed marginal costs.
- imperfect information.
- normative economics

The opportunity cost is the cost of the alternative that we waive when we make a certain decision, including the benefits that we could have obtained from having chosen the alternative option.

Therefore, the opportunity cost is those resources that we no longer receive or that represent a cost due to the fact that we have not chosen the best possible alternative, when we have limited resources (usually money and time). The term opportunity cost is also referred to as "the value of the best option not selected."

In our lives we have to constantly make decisions for any matter, especially if they are related to money. For example, imagine that we have 10 dollars and we have several alternatives to spend them (go to the movies, take a walk in the park and save them, dine out ...), the opportunity cost will be the benefit that the alternative to that we have given up, fundamentally the one with the highest value.