O See Hint Like a good economist, you calculated the opportunity cost of getting

Question

O See Hint Like a good economist, you calculated the opportunity cost of getting your college degree. Suppose that at your university you will pay $10000 each year for tuition, $2500 each year for textbooks, and $10000 per year for room and board. Before you left for college, your boss at your high-school job offered you a job paying $20000 per year Assume that if you decided not to go to college. your parents would not let you live at home. What is your opportunity cost for four years of college? $

Explanation / Answer

Opportunity cost of 4 years of collge: Tution fees paid for 4 yrs @ 10000 40000 Textbook charges paid for 4 years @ 2500 10000 Loss of Income after high school for 4 years 80000 (@ 20000) OPPORTUNITY COST OF COLLEGE 130000 Note: The Rental paid is irrelevant cost which need to be paid under both the options. hence not taken in computation.

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