Opportunity cost refers to the value of the best alternative we forgo when making a decision. For example, if you spend your money on a new video game instead of going to the movies, the opportunity cost is the enjoyment and experience of watching the movie.
Being aware of opportunity cost helps us make better decisions by understanding the trade-offs involved and making choices that align with our priorities and goals. It’s a reminder to consider what we’re giving up whenever we choose one option over another.
