opportunity cost

Question

Debbie quits her job, which pays $30,000 a year, to finish her college degree. Her annual college expenses are $10,000 for tuition, $2,000 for books, and $700 for food. What is her opportunity cost of attending college for the year?

Answer 1

The choice is either take a job or go get a college degree.

Debbie could have $30,000 without going to college. Since she chose to quit her job and finish school, she will have to pay $12,700 (total expense) for that year.

Debbie's opportunity cost is the sum of her college expenses plus the money she could have earned had she chosen not to work. Her opportunity cost to attend college is $42,700.