An example of an opportunity cost is the cost of tuition while attending college or university instead of the hourly rate you could earn from being employed.

Question

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Opportunity cost is the value of the next best alternative that is forgone in order to pursue a certain action. In this case, the cost of tuition is the opportunity cost because it is the value of the next best alternative (earning an hourly rate from being employed) that is forgone in order to attend college or university.

An Example of an Opportunity Cost Is the Cost of Tuition