Final answer:
The annual opportunity cost of attending graduate school is the total of the tuition fees and the foregone salary. The cost equates to $206,000 if tuition is annual; if not, it is the foregone salary of $56,000.
Step-by-step explanation:
The concept of opportunity cost is central in economics and represents the benefits an individual, investor, or business misses out on when choosing one alternative over another. In this case, the opportunity cost of attending graduate school involves both the actual cost of the school and the foregone earnings that could have been made if the graduate had chosen to work instead.
Since the cost of attending graduate school is $150,000 and the foregone annual salary is $56,000, the annual opportunity cost would be the combined cost of tuition plus the lost salary. Therefore, the annual opportunity cost is $150,000 (tuition over the period of the degree, which is often summed annually) plus the $56,000 of lost salary, totaling $206,000 per year if the program is one year in length. However, if the $150,000 tuition is for the entire duration of the program and not annual, the annual opportunity cost would simply be the annual salary the student is foregoing, which is $56,000.
In conclusion, the final answer in two line explanation in 200 words: The correct answer is $206,000 if the $150,000 tuition is expected per year. If the tuition is not an annual cost but the total cost for the entire program, the answer is $56,000.