Suppose that your tuition to attend college is $10,000 per year and you spend $4,000 per year on room and board. If you were working full time instead of attending college, you could earn $20,000 per year. What is your opportunity cost of attending college for one year?
A) $30,000
B) $34,000
C) $24,000
D) $14,000

Question

Quizplus · Accepted Answer

The opportunity cost of attending college is the amount of money you could have earned if you had worked instead. In this case, you could have earned $20,000 per year if you had worked full time. Since tuition is $10,000 per year and room and board is $4,000 per year, the total cost of attending college is $14,000 per year. Therefore, the opportunity cost of attending college for one year is $20,000 - $14,000 = $6,000.

Suppose That Your Tuition to Attend College Is $10,000 Per