In an attempt to boost enrollment, in January, 1996, a private college in Iowa offered free tuition for graduating high school seniors from the county where it is located.For students who accepted the offer, how did this offer affect the opportunity cost of attending college?
A)The opportunity cost did not change, since lost earnings were still a factor.
B)The opportunity cost became zero for the typical student.
C)The opportunity cost was very low, because the only cost was for books and supplies.
D)The opportunity cost did not change, since tuition was not a factor in computing opportunity cost.
E)The opportunity cost was lower than if tuition was charged, but there was still a cost.

Question

Quizplus · Accepted Answer

While tuition was not a factor in calculating opportunity cost before the offer, now that tuition was covered, the opportunity cost became lower. However, there may still be other costs such as room and board, textbooks, and lost earning potential while attending college full-time. Therefore, option E is the best choice.

In an Attempt to Boost Enrollment, in January, 1996, a Private