Suppose your expenses for this term are as follows: tuition: $10,000, room and board: $6,000, books and other educational supplies: $1,000.Further, during the term, you can only work part-time and earn $8,000 instead of your full-time salary of $20,000.What is the opportunity cost of going to college this term, assuming that your room and board expenses would be the same even if you did not go to college?
A)$11,000
B)$17,000
C)$23,000
D)$29,000

Question

Quizplus · Accepted Answer

The opportunity cost of going to college is the value of the next best alternative forgone. In this scenario, the next best alternative is not going to college and continuing to work full-time, earning a salary of $20,000.

Therefore, the opportunity cost of going to college this term is:

Opportunity Cost = Full-time Salary - Part-time Salary - Expenses that would not have been incurred

Opportunity Cost = $20,000 - $8,000 - $6,000 - $1,000
Opportunity Cost = $5,000

So, the best choice is option C as it represents the opportunity cost of going to college which is $23,000 ($5,000 + tuition expense of $10,000 + $6,000 for room and board).

Suppose Your Expenses for This Term Are as Follows: Tuition