An example of opportunity costs would be my own decision to pursue a part time degree at Athabasca University. As a result of this decision to pursue further education I have to forego personal time and pleasure activities in order to study and I have to forego monetary earnings when I have to take time off work to complete course exams. These are examples of some of the opportunity costs of my decision to pursue a degree.
Opportunity cost is an important economic principle that affects how individuals and businesses make decisions each day. It is important because, we continually face tradeoffs and opportunity costs can determines what we do, the decisions we make and how we live and it helps make responsible suggestions for the allocation of scarce resources in the economy.