Economic Issues and Policy 5th Edition by Jacqueline Murray Brux

Exercise 10

Consider the following. Joe is deciding whether to go to college full time. If he does not attend college, he will continue to work at his present job. Joe earns $14,000 annually. He estimates that tuition and fees at the local public college will be about $10,000 per year and that he can graduate in four years if he does not work. The starting salary in the field he hopes to enter is about $30,000, and he estimates that he will earn about $600,000 more in his working lifetime with a college degree than without one. What will be Joe's opportunity cost of four years of college What will be his net benefits (benefits minus costs) Should he make the investment in education