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 buy the part on eBay because I knew how to fix it. While I was replacing the screen, I put back screws in the wrong spots. As you know the Iphone screws have different sizes: long, short, big, thin. It is difficult for you to distinguish between Iphone screws by human eyes. If you put back screws in the wrong spots, it will damage the motherboard that what I did. It caused my iPhone speaker and home button damage. Aftermath I estimated the cost of the repair wasn’t worth it, 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 on some big things like going to college or technical school or running a business, you should apply opportunity cost because it may affect you in the long term of your life. For example, if you choose 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 is not trivial like the repair or buying a cellphone. Many people benefit from graduating college but many others become miserable after graduating the college. One remedy can’t apply to 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.