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1. A cost is something that is given up when a decision is made. It represents the value of the best alternative foregone in order to pursue the chosen option.
2. Costs can come in various forms such as monetary expenses (like buying a product), time spent (opportunity cost of engaging in one activity instead of another), or even emotional costs (sacrifices made for a decision).
3. In economic terms, costs are important in decision-making as they help individuals and businesses evaluate trade-offs and make informed choices to maximize their objectives.
4. On the other hand, benefits are the gains or advantages that result from a decision and can be compared with costs to determine if the decision is worthwhile.
Understanding costs is essential in analyzing choices and making rational decisions that align with one's goals.
