Is there a formula for figuring out opportunity costs? If so, what is it?

Question

I am having trouble comprehending opportunity cost and need to for my economics class. I have a learning disability which doesn't allow my brain to understand by examples. If anyone can explain opportunity cost in simple terms I would appreciate it.

Answer 1

Opportunity cost is what you have to give up in order to get something else. The thing you have to give up is called the opportunity cost.
For example, if you have to give up your good pay job to start a business, your opportunity cost would be the cost of losing your job and salary. Had you not giving up you job, you would still be earning a salary. Would that make sense to you?

Answer 2

Most drivers at that level begin their racing careers by racing go karts at a very early age. And I don't mean buzzing up and down residential streets, but real, sanctioned, organized races. By the time they've reached your age, they will already have as much as fifteen years experience behind the wheel of a competition vehicle. Starting now, you'd have a lot of catching up to do to gain enough experience. Consider, also, that a car owner isn't just going to put in a two or three hundred dollar race car unless you have SOME experience in high speed racing. If ther is a path for you, it might begin with amateur competitions, such as car rallies, autocross, and Sports Car Club of America (SCCA) events. Even then, unless you have your own equipment, you won't be able to just hop in someone else's car and floor it. I suggest to find a racing school, usually associated with a local road race track venue. Sign up for a course, pick up some skills and go from there. The path to ANY pro racing is long and arduous, but Formula Racind is considered the ultimate level of automotive competition. You can't really be too disappointed if the closest you get to Le Mans is a paddock pass behind the wall. Good luck.

Answer 3

Opportunity costs are straightforward, you simply need to figure out how much it would cost and/or how much money or income it you would make on both sides of the decision including all aspects, salary, expense, parking, ammenities, gas, tuitions, whatever is applicable and compare. For financial calcualtions, the WACC calcualation can be considered related especially if you are discussing stock costs take a look at the following sight. Hope this helps.

http://www.valuepro.net/approach/wacc/wacc.shtml

Answer 4

If I had the formula, do you think I'll pass it on to you??