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Opportunity Costs

Given that a decision maker has to choose how to use a limited resource, the opportunity cost is the value of the best use of the resource other than the use actually chosen. No matter what choices are made in education, or in any other endeavor, there is always an opportunity cost. This entry describes opportunity costs, provides numerous instances within education finance and policy where opportunity costs are relevant, describes how the concept of opportunity cost can be used to help determine whether decision makers are making the best use of available resources, and discusses how measures of opportunity cost can differ depending on what the observer considers valuable.

For example, a school district may unexpectedly have additional funds to spend. The school board can ...

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