When making decisions about strategic investments, management must always consider the concept of Opportunity Cost, which is crucial in economics.
Opportunity cost is the value of the best opportunity forgone in a particular choice. It is not simply the amount spent on that choice. The concepts of scarcity, choice, and opportunity cost are at the heart of economics. A good is scarce if the choice of one alternative requires that another be given up.
Example:
1. I preferred to cook at home rather than eating unhealthy food at outside.
2. I Spent my free times in stead of wasting times gossping with others.