Brain Food: The Three Lenses of Opportunity Cost

The concept of opportunity cost is important for two reasons. First, if you don’t understand the opportunities you are losing when you make a choice, you won’t recognize the real trade-offs that you face. Recognizing trade-offs is the first step in making wise choices. Second, most of the time people do respond to changes in opportunity costs—even

the opportunity-cost principle: Consider what opportunities you’re forgoing when you choose one option over another.