Opportunity cost is an important concept in economics that refers to the cost of something in terms of what you could have had instead. In other words, it’s the trade off between the thing that you choose and the next best thing you could have chosen. For example, if you have $20 to spend on a movie ticket vs. spending it on lunch, the opportunity cost of going to the movies would be lunch. It is an important concept because it shows us that all decision-making involves some kind of trade-off and that every choice has an associated cost.