Opportunity Cost

In economic, opportunity cost is the cost incurred when an opportunity is forgone in favor to other alternative due to limited resources. Opportunity cost usually is the 2nd best alternative that we let go because we only have resources to commit the best alternative. For example, if a government decided to build an university on a vacant land, the opportunity cost would be the cost of some other use of the land, such as building hospital, stadium, housing estate, etc. on the land.