Business Report: Explaining an economic concept - Hawaii News Now - KGMB and KHNL

Business Report: Explaining an economic concept

(Image: Hawaii News Now) (Image: Hawaii News Now)
HONOLULU (HawaiiNewsNow) -

The concept of economics comes up in your life all the time. When you decide to do something, it means you're not doing something else. Economists call this, opportunity cost.

Suppose you decide to play a game, and you're in the thick of it when the phone rings and it's your boss, who needs to cover an extra shift.  This is an extra shift for you, which means, not eight hours' extra pay, but twelve, since it's overtime, paid at time-and-a-half. But suppose you say no thanks and grab the controller. You give up the opportunity to earn extra money. That's opportunity cost.

It's not always a bad thing. Hawaii is filled with people who willingly incur the opportunity cost that results from living here instead of some other place where costs are lower or the pay is better. But whenever you make a major money decision, it's worth considering what you're leaving on the table.

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