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Opportunity Cost

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The New Palgrave Dictionary of Economics

Abstract

The concept of opportunity cost (or alternative cost) expresses the basic relationship between scarcity and choice. If no object or activity that is valued by anyone is scarce, all demands for all persons and in all periods can be satisfied. There is no need to choose among separately valued options; there is no need for social coordination processes that will effectively determine which demands have priority. In this fantasized setting without scarcity, there are no opportunities or alternatives that are missed, forgone, or sacrificed.

This chapter was originally published in The New Palgrave Dictionary of Economics, 2nd edition, 2008. Edited by Steven N. Durlauf and Lawrence E. Blume

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Bibliography

  • Alchian, A. 1968. Cost. In Encyclopedia of the social sciences, vol. 3. New York: Macmillan.

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  • Buchanan, J.M. 1969. Cost and choice. Chicago: Markham, Republished as Midway Reprint, Chicago: University of Chicago Press, 1977.

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  • Buchanan, J.M., and G.F. Thirlby (eds.). 1973. LSE essays on cost. London: Weidenfeld and Nicholson. Reissued by New York University Press, 1981.

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  • Coase, R.H. 1960. The problem of social cost. Journal of Law and Economics 3: 1–44.

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  1. http://link.springer.com/referencework/10.1057/978-1-349-95121-5

    James M. Buchanan

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  1. James M. Buchanan
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    Buchanan, J.M. (2008). Opportunity Cost. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95121-5_1433-2

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    • DOI: https://doi.org/10.1057/978-1-349-95121-5_1433-2

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    • Publisher Name: Palgrave Macmillan, London

    • Online ISBN: 978-1-349-95121-5

    • eBook Packages: Springer Reference Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences

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    Chapter history

    1. Latest

      Opportunity Cost
      Published:
      06 March 2017

      DOI: https://doi.org/10.1057/978-1-349-95121-5_1433-2

    2. Original

      Opportunity Cost
      Published:
      26 November 2016

      DOI: https://doi.org/10.1057/978-1-349-95121-5_1433-1

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