If your tuition is $25,000 this semester, your books cost $1,500, you can only w
ID: 1152526 • Letter: I
Question
If your tuition is $25,000 this semester, your books cost $1,500, you can only work 20 rather than 40 hours per week during the 15 weeks you are taking classes and you make $15 per hour, and your room and board is $7,500 this semester (same as if not attending college), then what is your opportunity cost of attending college? For full credit, you must show your work and explain your answer. Correct final answer without supporting explanation will only count for partial credit (2 points out of 5)Explanation / Answer
Tution = $ 25,000
Books = $ 1,500
No. of weeks = 15
No of hours can work = 20 hours
Total no. of hours can work ( No college) = 40
No of hours Sacrificed = 40 - 20 = 20 hours
Per hour earning = $15
Room and board $7500 (ignore this amount because it will incur in both cases whether you attend or don't attend college)
Opportunity Cost = Tution + Books+ Per hour earning ×No of hour sacrificed×no of weeks
Opportunity Cost= $25,000+2000+15*20*15
= $ 25,000+2,000+4,500
= $ 31,000