Emma spends $40,000 for one year's tuition at university. The opportunity cost of one year at university for Emma is:
A)$40,000.
B)whatever she would have purchased with the $40,000 had she not attended university.
C)whatever she would have earned had she not attended university.
D)whatever she would have purchased with the $40,000 plus whatever she would have earned had she not attended university.

Question

Quizplus · Accepted Answer

The opportunity cost includes both the actual expenses incurred by attending university ($40,000) and the income she foregoes by not working during that time. Therefore, it encompasses both what she could have bought with the $40,000 and what she could have earned.

Emma Spends $40,000 for One Year's Tuition at University