Question

Margo spends $30,000 on one year's college tuition. The opportunity cost of spending one year in college for Margo is:

A. whatever she would have earned had she not been in college.
B. whatever she would have purchased with the $30,000 instead.
C. whatever she would have purchased with the $30,000 plus
D. whatever she would have earned had she not been in college. $30,000.

Answer 1

Purchases she could have made with $30,000 plus the earnings foregone

Step-by-step explanation:

Opportunity cost refers to the benefit obtained from the next best alternative.

Here, the opportunity cost of spending a year in the college is the purchases worth of $30,000 that she would have do it and the money income that she would have earned it.

Opportunity cost can be represented in terms of monetary and non monetary.