Opportunity cost

Opportunity cost -  is the cost that is being lost to the benefit of limited resources to achieve one goal instead of another, the best of options.  It is the sacrifice related to the second or third choice available to someone who has picked among several mutually exclusive choices. Because the opportunity cost is expressed by any measure, it sometimes has the name "shadow price", "price of lost chance", "price of economic efficiency."

For example you own a car, you can use it for your own purposes, you can rent, lease or even sell. Every time opportunity cost will be different.

For some products to determine opportunity cost is difficult because virtually no active competitive market sells this kind of products. These products primarily include land which value is usually inadequately estimated by market. In many countries the value of the land affects non-economic factors:

·                  safeness

·                    traditions

·                    family relationships

·                    etc.

Methods of determining alternative land value:

·               rents under the conditions of the developed land lease market

·        direct assessment of land productivity by evaluating agricultural crops that are grown on it, and determine the contribution of land value of total production"

·    "remaining" method of determining the impact fee land on the basis of surplus value,which can be obtained from its use

Thus, you shouldn`t always seek for the actual value of the goods, which we view and value of the goods or services from which we refuse.