Question

Joe spends $20,000 during his two semesters in college on rent, food, books, tuition, and entertainment. Joe’s opportunity cost of attending college for the two semesters is $20,000.
1. True
2. False

Answer 1

Answer:

2.False

Explanation:

Opportunity cost in simple terms refers to the next best alternative.

Opportunity cost refers to the benefits foregone of non chosen options when one of those options is chosen. For e.g opportunity cost of attending a full time college is the loss of salary had the same student opted to work, in addition to college fees paid for the period of study.

In the given case, the costs expressed such as college fee, rent, food, books, tuition and entertainment is explicit costs. Secondly no second non chosen option is mentioned in the question.

Thus, the given statement is false.