 In this module, we are going to explain the term opportunity cost that we have widely utilized in our various lectures. So, this opportunity cost is basically based on the concept of the alternative opportunity or the alternative utilization that is mostly available with the resources of the production. So, there can be the availability of the land and that land can be utilized for the production of various crops. And the same land can be utilized for the production of various fodder. And even at the same time, if we are having the money in our hand, that money can be utilized for the purchase of either food, either for clothing or for the books. So, these are the alternative utilizations available. So, the consumer has to decide between these alternative utilizations and for these alternative utilizations, when we have to forego one source of consumption with the other or either we have to sacrifice one production for the other, that will include the concept of opportunity cost. And not only the money, not only the land, even we consider the time. In the 24 hour, if we say that the time that is available, we can utilize this time either for the production of anything means in the work. Either we can utilize this time for the utilization of certain entertainment means any type of the layer. And so we have to decide or prioritize that how much hours we will utilize for the work and how much hours we will utilize for the entertainment. And if we have to sacrifice our one hour of our entertainment when we have exams, in other words, if I tell you that during the exams, if you sacrifice your time for your game or entertainment, and apply it to some higher education, then it becomes your opportunity cost of games that you are applying. And if we look at it in another form, in the family, if someone gets sick, and you have to take off your college or university several times for their care, then the time you applied for their care, that time, the education that was not available to you, becomes the opportunity cost of that patient's care. So this concept is not only used in production, it is used anywhere when we will use two resources, two alternatives. It can be consumption, it can be work, it can be production. And similarly, we have taken an example here of sugar versus ethanol. So many times, not at the international level, but at the national level, the government has to decide on the economy or the country level. If there is a sufficient amount of sugar in the country, then what sugar is generated from that sugar? Or using the same sugar that is generated from that sugar, we have to use ethanol, which is another form of fuel. So now the government has to decide that either the opportunity cost of sugar is more or the opportunity cost of ethanol is more. So this opportunity cost is basically a tool that gives the indicator to the producer or the consumer to decide or to prioritize the various activities that they have in their hand that which has to be allocated more resources and for which we have to allocate less resources. So now if we explain this with the help of a graph, so here we have taken this one graph on its X axis, we have explained that a good X that is the clothing that is going to be produced and with the same resources, we are going to produce the food. So overall, this thing that provides that this is the production possibility frontier for the production of these two goods and at the point A, this amount of food is going to produce and at the point B, this amount of food is going to be produced and if we take the difference between this point and this point on vertically, it gives us the difference of this that is basically on Y axis and this is the change in the amount of food production. So from point A to point B, movement will include the loss of this production that we have sacrificed that at point A we were having food quantity in more number but at point B, we are again producing the food but in less amount. So this amount that we have sacrificed for the attainment of this amount of clothing and mean this shows the movement of point B, for the point B from this C1 to C2. So this movement and here we can say that the change in F divided by change in C is basically the change in the opportunity cost or we can say that it is the opportunity cost of this and it gives the marginal rate of transformation. So this is basically not only the foregone level of the output in other form if we say that at point B, at point A the production that was available of the food and of this clothing. So for food, there was certain level of capital and labor for food and that was divided by the capital and labor ratio that was utilized for the production of clothing. And on the other at point B we again say that that is the capital and labor ratio for food and that has to be divided by capital and labor ratio for clothing. So at these two points when we say not only in the form of the output this ratio when divided by this ratio it gives us the opportunity cost that is the foregone benefit or the foregone cost of that alternative use of these things.