Many of us apply opportunity cost in our daily life, but we often don’t know what opportunity cost mean.
It means that we may lose potential gains from choosing other alternatives. When we apply opportunity cost in the right time and appropriate situation, it may benefit in life.
For example, few weeks ago, my Iphone 7 Plus screen was broken. After I checked the repair service cost at the store ($125) and the Iphone part cost($40), I decided to to buy the part on Ebay because I knew how to fix it. While I was replacing the screen, I put back screws at wrong places. As you know the Iphone screws are different size: long, short, big, thin. It is difficult for you to distinguish among Iphone screws by human eyes. If you put back screws on the wrong places, it will damage mother board that what I did. It caused my son Iphone speaker and home button damages. Aftermath I estimated the cost of repair wasn’t worthy, so I decided to buy the used Iphone 7 Plus on Ebay. You see we often apply opportunity cost without our notice. When you decide the some big things like go to college or technical school or run business, you should apply opportunity cost because it may affect in long term of your life. For example, you choose the college as your alternative, you have to make sure your degree and knowledge that you acquired from college will benefit your life in the long run because the cost of college and time are not trivial like the repair or buy the cellphone. Many people benefit from graduating college but many others become miserable after graduating the college. One remedy can’t apply for many people with the same problem. It is up to us to choose which remedy can solve our problem.
We should not apply opportunity cost when human relation involved. For example, a female executive with salary $300/hour hiring babysitter to take care for her children. In term of financial, she can gain but she will lose her relationship with her children. Please share this article to your social media friends. Please drop comments below if you have same or different idea with me.