Elina is contemplating doing a degree.If she does she will incur university fees of $20,000 in her first year and have to spend $5,000 on textbooks and university supplies, expenses that she would not have otherwise incurred.To come to university Elina will also have to give up her job in a local brewery from which she earns $35,000 a year.What is the opportunity cost of Elina attending university for a year?
A)$40,000
B)$35,000
C)$5,000
D)$25,000
E)$60,000

Question

Quizplus · Accepted Answer

The opportunity cost includes all the expenses and lost income due to attending university: $20,000 (university fees) + $5,000 (textbooks and supplies) + $35,000 (foregone salary) = $60,000.

Elina Is Contemplating Doing a Degree