Opportunity cost is not recognized in calculating [[accounting]] cost and profits, but is recognized in calculating [[economic]] costs and profits. Due to the concept of opportunity cost, it may be more economically advantageous to pass up opportunities that would seem profitable from an accounting standpoint. For instance, a famous basketball player might seem to save money by mowing his lawn himself instead of hiring somebody else to do it, but if this cost him the opportunity to make thousands of dollars by playing in a game that night, the opportunity cost of mowing his own lawn would be thousands of dollars. | Opportunity cost is not recognized in calculating [[accounting]] cost and profits, but is recognized in calculating [[economic]] costs and profits. Due to the concept of opportunity cost, it may be more economically advantageous to pass up opportunities that would seem profitable from an accounting standpoint. For instance, a famous basketball player might seem to save money by mowing his lawn himself instead of hiring somebody else to do it, but if this cost him the opportunity to make thousands of dollars by playing in a game that night, the opportunity cost of mowing his own lawn would be thousands of dollars. |