Question

What is the opportunity cost of college? Determine whether the following costs are opportunity costs or not.

1 Tuition
2 Student fees
3 Transportation
4 Books
5 Salary
6 Insurance
7 Room and board

a. 1,2,3,4 is opportunity cost and 5,6,7 is not opportunity cost
b. 1.2.3. is opportunity cost and 4,5,6,7, is not opportunity cost
c. 1,2,3,4,5 is opportunity cost and 6,7 is not opportunity cost
d. 1,2 is opportunity cost and 3,4,5,6,7 is not opportunity cost

Answer 1

The opportunity cost of college includes the value of the best alternative use of money spent, and the value of the forgone alternative uses of time spent studying and attending class.

Step-by-step explanation:

The opportunity cost of college is the value of the best alternative use of money spent for tuition, fees, and books. However, the most important cost of a college education is the value of the forgone alternative uses of time spent studying and attending class instead of using the time in some other endeavor. This is because during the hours that students are attending class and studying, it is impossible to work at a paying job, which results in a lost opportunity to earn a salary.

Based on the provided options, the following costs are opportunity costs:

1. Tuition
2. Student fees
3. Transportation
4. Books

On the other hand, the following costs are not considered opportunity costs:

1. Salary
2. Insurance
3. Room and board