Upon High School graduation you had to choose whether to go to college or go to work.
You have to choose whether to plant corn, soybeans, or both.
By choosing to go to college, you have given up the opportunity to begin a career and the associated income that is lost by attending college. Later, I hope to demonstrate for you that the opportunity cost of going to college is very expensive. It may even be the most expensive element in obtaining a college education.
If you are an agricultural producer, you know that when you plant corn on a tract of land, you can’t plant soybeans on that same tract of land. When you choose to plant corn, you give up the income that could have been earned by planting soybeans. An opportunity cost. Heck, when you plant anything on a tract of land, you give up the opportunity to rent that land to another agricultural producer. Therefore, you incur another opportunity cost, the rent you could have received. Assume you could have rented an acre of your land out at $60.00 per acre, but chose to put in a crop of corn yourself. At the end of the season you determine that you cleared $35.00 an acre accounting for all operating and ownership costs. Did you really make money? An economist will tell you no, that you really lost money. You could have rented that land for $60 per acre, sat back, and enjoyed life during the growing season. Instead, you busted your backside, worried yourself about the weather and the market, and cleared $35.00 an acre. An economist would point out that you really lost $25.00 an acre from your choice ($35 - $60 opportunity cost).