From the ever excellent Economistsdoitwithmodels:
Economists are quick to point out that the true cost of something, whether it be a physical good, an activity, etc., is what one has to give up in order to get that thing.
This cost includes both explicit costs, which are costs than involve an actual outlay of money or credit card or whatever, and implicit costs, which are the values of the other opportunities that have to be passed over in order to consume a good or perform an activity.
One common implicit cost is the value of one’s time, since, by definition, time spent on one activity can’t be spent on other activities.
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