You plan to extend NCC camp for two months. If you do, you wont be able to take your usual part time job that pays Rs. 10000 for two months and you wont be able to live at home for free. The cost of your NCC camp includes - living expenses Rs. 2000/- constume and stationary expenses Rs. 3000 and study material Rs. 1000/-. Calculate the MOC of joining NCC camp?
Opportunity cost refers to sacrificing the benefits of the consumption of one good for the consumption of other good. In this case the MOC of joining the NCC camp would be the leisure time at home that he could have enjoyed plus Rs 16,000 (Rs 10,000 which he could have earned for two months + Rs 6,000 worth expenses which he would have to pay in NCC). So, the amount of Rs 16,000 is the opportunity cost of joining the NCC camp.