Opportunity Cost
Benefit foregone by choosing one option over another.
Formula
Opportunity Cost = Benefit of next-best alternative foregone
Real World
When Elon Musk invested his PayPal windfall into SpaceX rather than keeping it in safe assets, the opportunity cost was the guaranteed interest income he sacrificed.
Exam Focus
Always state what is given up, not just what is chosen — the mark scheme requires identification of the foregone benefit.
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