Question

Suppose that your tuition to attend college is $24,000 per year and you spend $8,000 per year on room and board. If you were working full time, you could earn $30,000 per year. What is your opportunity cost of attending college for one year?

Answer 1

Answer: $54000

Explanation:

The opportunity cost in the given scenario will be $54000, i.e. the cost of attending college and the cost of not choosing the next best alternative, which in this case working full time.

∴ Opportunity cost = Cost of attending college + Earning (if working full time)

Opportunity cost = $24000 + $30000 = $54000