Question

Suppose that your tuition to attend college is $14,000 per year and you spend $5,000 per year on room and board. If you were working full time, you could earn $26,000 per year. What is your opportunity cost of attending college?

A. $19,000
B. $31,000
C. $40,000
D. $45,000

Answer 1

Answer:

Option (d) is correct.

Explanation:

The opportunity cost refers to the benefit that would be obtained from the next best alternative.

Here, given that

Tuition cost for attending college = $14,000 per year

Room cost = $5,000

Money income could be earned = $26,000

Therefore, the Opportunity cost is as follows:

= $14,000 + $5,000 + $26,000

= $45,000