# Economic Opportunity Cost

## Definition

The foregone benefits that result from limited market access, including the inability to specialise fully, the necessity of self-sufficiency, and the reduced potential for productivity gains through division of labour. Economic opportunity cost represents the price paid for restricted market extent.

## Source Chapter

Book I, Chapter 3

## Context

Smith illustrates economic opportunity cost through examples: the inability to dispose of one day's work per year for a nailer in the highlands, or the necessity for farmers to be their own butchers, bakers, and brewers, showing what is lost when markets are too small to support specialisation.

## Economic Domain

General Theory

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