Question
As the term “opportunity cost” is defined in the text, the opportunity cost of going to college includes
a. tuition but not the value of the student’s time, which is a cash cost.
b. neither tuition nor the value of the student’s time, at least at subsidized state universities.
c. neither tuition nor the value of the student’s time, since obtaining a college degree makes one’s income higher in the future.
d. both tuition and the value of the student’s time.
e. the value of the student’s time but not tuition, which is a monetary cost.
a. tuition but not the value of the student’s time, which is a cash cost.
b. neither tuition nor the value of the student’s time, at least at subsidized state universities.
c. neither tuition nor the value of the student’s time, since obtaining a college degree makes one’s income higher in the future.
d. both tuition and the value of the student’s time.
e. the value of the student’s time but not tuition, which is a monetary cost.
Ask by Black Whittaker. in the United States
Mar 21,2025
Upstudy AI Solution
Tutor-Verified Answer
Answer
The opportunity cost of going to college includes both tuition and the value of the student’s time.
Solution
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The opportunity cost is defined as the sum of the explicit (monetary) cost and the implicit cost (the value of the next best alternative forgone).
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In the context of going to college:
- The tuition is an explicit (monetary) cost.
- The value of the student’s time (i.e., the money they could have earned if working instead) is an implicit cost.
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Therefore, the opportunity cost of going to college includes both the tuition and the value of the student’s time.
Thus, the correct answer is
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Simplify this solution Beyond the Answer
The concept of opportunity cost can be traced back to the early 19th century with economists like David Ricardo and later expanded upon by others like Friedrich von Wieser. It emphasizes that every choice we make comes with a trade-off, meaning when you choose one option, you inevitably forgo the potential benefits of another. In the context of college, it highlights the need to consider both financial expenses and personal time invested.
In the real world, understanding opportunity cost is crucial for making informed decisions about education, career paths, and investments. For instance, someone may weigh the benefits of working full-time versus pursuing higher education, considering not just the tuition fees but potential lost income. By assessing these trade-offs, individuals can better align their choices with their long-term goals and financial health.
