What Is Opportunity Cost?

Every time you pick one thing, you give up something else. This is called opportunity cost.

Imagine you have a cookie and an ice cream. If you eat the cookie, you cannot eat the ice cream. The ice cream is the price of the cookie.

Why It Matters

Life is full of choices. You cannot do everything at once. Time is the most precious resource.

If you spend an hour playing video games, you are not doing homework. The homework is the opportunity cost. It is not money, but it is real.

Look at your choices. Ask: What am I giving up? If you buy a toy, you give up saving for a bigger gift. If you nap, you give up playtime.

Opportunity cost is not just money. It is often time or fun.

Remember: every yes is a no to something else.

If you spend your allowance on a toy, you cannot buy a comic book.
Choosing to play outside means you miss out on watching your favorite show.
Eating the last cookie means your sibling gets nothing, making the hunger of the sibling the cost.