You choose to complete your homework rather than watch television so that you can earn a good grade. You made the choice with the lowest

You made the choice with the lowest "Opportunity cost".

Explanation:

Opportunity cost in simple terms, can be explained as "You get one by losing the other".

So why this opportunity cost is necessary? Let us understand.

This plays a significant role in "Personal finances". This is the effective part to be learnt to make decisions on finance.

Some of the real life examples are listed below:

Attending the interview is important than attending an entertainment event Only if you spend time and money you can see a movie

"Theorie der gesellschaftlichen Wirtschaft" coined the word "opportunity cost".