Congratulations,you have been admitted to the Blue-and-Blue College.Your annual expenses are as follows: $19,000 for tuition,$1,000 for fees and books,and $4,000 for room and board.You are also receiving a scholarship of $7,500.The next best alternative to going to college is to get a full-time job that pays $24,000 a year (after taxes).What is your opportunity cost of going to college?

Question

Quizplus · Accepted Answer

The total expenses for attending Blue-and-Blue College (after subtracting the scholarship) are $19,000 + $1,000 + $4,000 - $7,500 = $16,500. 
Therefore, the opportunity cost of going to college is the income forgone by not pursuing the next best alternative, which is a full-time job that pays $24,000 after taxes. 
The opportunity cost is calculated as follows: 
Opportunity cost = Income from next best alternative - Income from chosen option 
Opportunity cost = $24,000 - $16,500 
Opportunity cost = $7,500

Therefore, the opportunity cost of going to college is $7,500.

Congratulations,you Have Been Admitted to the Blue-And-Blue College