Question

Before you started applying for college, a job recruiter offered you a full-time cashier position at a doctor's office earning an after-tax salary of $23,000 per year. However, you turn down this offer and attend your first year of college. The additional monetary cost of college to you, including tuition, supplies, and additional housing expenses, is $36,000.
You decide to go to college, probably because ________________________
you value a year of college at more than $59,000
you value a year of college less than $36,000
you value a year of college at $36,000
you value a year of college at $23,000

Answer 1

Answer:

The answer is: you value a year of college at more than $59,000

Explanation:

Your total economic cost of going to college for one year is the sum of the $36,000 you spent in tuition, supplies and other expenses plus your opportunity cost of going to college, which is $23,000 (the money you could have earned by doing something else).

• Economic cost = $36,000 + $23,000 = $59,000

So if you decide to go to college, that means that the benefit you get from going there is greater than $59,000.