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Money · Guided lesson

Calculate an opportunity cost

About 8 minutes · 3 reading + 5 practice and checks
Time includes reading, practice, and questions. Extra videos or further study are optional.
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A fictional local-market analysis with demand/supply schedules, equilibrium, shifts, opportunity costs and a bounded price-change explanation.

Keep your working files in your own notebook or software. Save a private description, checklist, and work link in My Proof.

What to include

  • An opportunity-cost table with feasible alternatives and explicit value assumptions.
  • A demand table and price-change quantity explanation.
  • A supply table with matched units and a condition-change note.
  • A market-balance table with model equilibrium and limits.
  • A shift/movement comparison with an explicit causal-assumption note.
  • A complete fictional microeconomic market brief.

Review and revise

Use these criteria to check your work and choose what to improve.

  • All supplied records reconcile and the decision uses the named case rules.
  • Calculations show units, intermediate values and a second check.
  • Changed-input practice revises the affected result and identifies uncertainty.
  • The final project combines six lesson records, separates fictional assumptions from current rules, and states a supported next step.
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Before you begin

The idea in everyday life

This is an original fictional practice case. No account, payment, personal record or outside participation is required. A fictional Saturday has one available two-hour block. Options valued by the learner: paid shift $30, free workshop valued $45, leisure valued $20. Only one can be chosen; values are supplied comparable dollar equivalents for this exercise.

The idea

The opportunity cost is the value of the best feasible alternative forgone, not the sum of every possible alternative.

Follow along

Calculate an opportunity cost — worked practice

The opportunity cost is the value of the best feasible alternative forgone, not the sum of every possible alternative.

Use paper or a local table; label all amounts as fictional USD unless the case names another unit. A fictional Saturday has one available two-hour block. Options valued by the learner: paid shift $30, free workshop valued $45, leisure valued $20. Only one can be chosen; values are supplied comparable dollar equivalents for this exercise.

Mutually exclusive two-hour choices

Paste at A1.

AChoiceBRequired hoursCSupplied comparable value USD
Paid shift230
Free workshop245
Leisure220

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  1. 1. Step 1: List feasible alternatives for the same block

    List feasible alternatives for the same block.

    You should see: Shift, workshop and leisure each use the whole block.

    The opportunity cost is the value of the best feasible alternative forgone, not the sum of every possible alternative.

  2. 2. Step 2: Select the highest supplied value

    Select the highest supplied value.

    You should see: Workshop value $45.

    Keep this intermediate result so the final decision can be checked.

  3. 3. Step 3: Identify the next-best feasible alternative

    Identify the next-best feasible alternative.

    You should see: Paid shift $30.

    Keep this intermediate result so the final decision can be checked.

  4. 4. Step 4: State the opportunity cost and assumptions

    State the opportunity cost and assumptions.

    You should see: Workshop opportunity cost $30, not $50 from adding both rejected options; subjective values are practice assumptions.

    Keep this intermediate result so the final decision can be checked.

Now change one thing

Shift value rises to $50. What is the opportunity cost of choosing the shift?

Your work

What to finish

An opportunity-cost table with feasible alternatives and explicit value assumptions.

Common mistake

Watch for this

Adding the values of mutually exclusive rejected alternatives.

How can I tell I understand it?

Identify the best feasible alternative forgone in a bounded resource choice on the supplied changed case while preserving the stated rule and checking the final record.

Try 3 questions

Quick knowledge check

Answer all 3 questions. Get at least 2 right and the lesson completes automatically.

Not yet passed

You’ll get an explanation for each answer. Signed in? Your results save to your account.

1One time slot has option values $60, $40 and $25. Opportunity cost of choosing $60?
2Two alternatives can actually both fit the slot together. What must be reconsidered?
3Why label workshop enjoyment as a supplied value assumption?
0 of 3 answeredApply the lesson to a short question, then review the explanation.
1
Finish this lesson

Pass the check. We’ll save the progress.

Answer all 3 questions above and get at least 2 right. You can review the explanations and try again.

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Sources and further reading

Explore the references behind this lesson.

Federal Reserve Education — Opportunity Cost
Source & access notes · checked 2026-10-01

Official page opened/read during Money expansion authoring; checked the relevant concept and access state. These sources do not establish funding eligibility.

Access: Official resource page and its readable overview/transcript inspected; no external LMS lesson or media playback is claimed.

Reuse: Original fictional practice, questions and calculations; paraphrased concepts with a source link. No source exercise copied.

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