Question

if Jane attends graduate school, it will take her two years, during which time she will earn no income. She will pay a total of $100,000 for tuition, $20,000 $2,000 for books. If she spends the two y cars working rather than attending college, she will pay a total oft $18,000 for room and board, pay no intuition, and buy no books. Based on this information, Jane's economic cost of attending graduate school would be $175,000 if, over the two years, she could earn a total of 53,000 instead of attending graduate school. $55,000 instead of attending graduate school. $71,000 instead of attending graduate school. $73,000 instead of attending graduate school. c. d.

Answer 1

she could earn a total of $71,000 instead of attending graduate school.

Step-by-step explanation:

economic costs = accounting costs + opportunity costs

Jane's accounting costs = $100,000 in tuition + $20,000 room and board + $2,000 books

Jane's opportunity costs = unearned wages - $18,000 room and board (already included in accounting costs)

if Jane's economic cost = $175,000, then her unearned wages would equal:

$175,000 = $122,000 + unearned wages - $18,000

$175,000 = $104,000 + unearned wages

$71,000 = unearned wages