Mankiw's definition and explanation of opportunity cost here is confusing. Since when have explicit costs become part of opportunity cost? Here is what the guide says:
The concept of opportunity cost is one of the most important ideas in economics. Consider the question, “How much does it cost to go to college for a year?” We couldadd up the direct costs like tuition, books, school supplies, etc. These are examples of explicit costs, i.e., costs that require a money payment. However, these costs are small compared to the value of the time it takes to attend class, do homework, etc. The amount that the student could have earned if she had worked rather than attended school is theimplicit cost of attending college. Implicit costs are costs that do not require a money payment. The opportunity cost includes both explicit and implicit costs.
Since explicit costs are out of pocket costs, they are not considered as opportunity cost. Am I missing anything here?
EDIT: Here is another explanation from Keat et al. Managerial Economics.
Opportunity Cost Versus Out-of-Pocket Cost Previous discussions pointed out that opportunity cost is one of the most important and useful concepts in economic analysis because it highlights the consequences of making choices under conditions of scarcity. We can now use this term in a more specific way to help explain the concept of relevant cost. Opportunity cost, as you recall, is the amount or subjective value that is forgone in choosing one activity over the next best alternative. This type of cost can be contrasted with “out-of-pocket cost.” On occasion, economists refer to opportunity cost as indirect cost or implicit cost, and refer to out-of-pocket cost as direct cost or explicit cost.