Question

Lauren was accepted at three different graduate schools, and she must choose one. Elite U costs $50,000 per year and did not offer Lauren any financial aid. Lauren values attending Elite U at $60,000 per year. State College costs $30,000 per year and offered Lauren an annual $10,000 scholarship. Lauren values attending State College at $40,000 per year. NoName U costs $20,000 per year and offered Lauren a full $20,000 annual scholarship. Lauren values attending NoName at $15,000 per year. Lauren's opportunity cost of attending State College is

Answer 1

The opportunity cost of attending state college is $20,000.

The computation is given below:

• Surplus arise from Elite U:

= $60,000 - $50,000

= $10,000

• Surplus arise from state college:

= $40,000 + $10,000 - $30,000

= $20,000

• Surplus arise from no name:

= $15,000 + $20,000 - $20,000

= $15,000

So, the opportunity cost of attending state college is $20,000.

Learn more about the opportunity cost here: brainly.com/question/13036997