ABSTRACT
The method of calculating opportunity cost continues, in the main, to be serviceable when extended to unemployed labour. In a less than fully employed economy, that is, the opportunity cost of such labour to the project is, again, equal to the social value of a worker's labour in its existing use, allowance also being made for the worker's occupational preference. More generally, to the value the worker attaches to his enforced leisure must be added the value of the externalities consequent upon his leisure activities and behaviour, in particular the effects on his friends and members of his family. The fact, then, that the marginal product of labour in, say, agriculture in some parts of Africa or Asia is zero may well warrant its opportunity cost to the project being equal to zero.
