Question

Kevin plans to go to college after he graduates from high school. The tuition is $8,000 a year, and room, board, and books cost $7,000 a year. If Kevin takes a full-time job instead of going to college, he would earn $30,000 a year. What is the opportunity cost if Kevin decides to attend college

Answer 1

Answer:

$30,000

Explanation:

Opportunity costs refers to the incomes or benefits a person, business or investor loses or forgone when one alternative is chosen over another.

Since Kelvin will lose earnings of $30,000 a year from a full-time job if Kevin decides to attend college, this $30,000 a year is therefore the opportunity cost.