Question

You are considering attending college for one term. Your costs for one term include: tuition: $21,000 food and apartment rent: $6,000 books and college supplies: $2,000. Also, college attendance implies that when you switch work hours to study hours your income will fall from $10,000 to $3,000 (for the full term). What is the opportunity cost of going to college for this term, assuming that your food and apartment rent are the same with college as without it

Answer 1

Answer:

Opportunity cost of going to college $7,000

Explanation:

Opportunity cost is the value of the next best alternative forgone in favour of a decision. In this scenario, opportunity cost would mean any income sacrificed by the college students because he wanted to take a college education.

                                                                                          $

Before the college he could make                             10,000

Switching work hours for study, he will now make   3,000

Opportunity cost                                                            7,000

Opportunity cost of going to college $7,000