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# Colonial Economic Opportunity Costs

## Definition

The foregone economic benefits that colonies sacrifice due to monopoly restrictions, including lost trade opportunities, inefficient resource allocation, and prevented economic development. These opportunity costs represent the gap between actual outcomes and potential prosperity under free trade.

## Source Chapter

Book IV, Chapter 7

## Context

Smith uses opportunity cost analysis to demonstrate the substantial economic losses created by colonial monopoly policies. He argues that the visible profits of monopoly trade obscure much larger invisible losses from prevented economic development and inefficient resource allocation.

## Economic Domain

General Theory

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