Question

Andrew quits his job as an accountant where he earns $65,000 per year to go back to school for two years to get an mba degree. he attends a school that charges $25,000 per year for tuition and related expenses. how much is the total cost (explicit cost plus opportunity cost) of that degree?

Answer 1

The total cost is $180,000. The explicit cost is $50,000 ($25,000 for 2 years). The opportunity cost is $130,000 ($65,000 for 2 years).