Margo attends college and spends $10,000 for one year's tuition. If she worked a full time...

Margo attends college and spends $10,000 for one year's tuition. If she worked a full time job instead of going to school, she would earn $20,000. To an economist, Margo’s opportunity cost for one year in college is

Group of answer choices

a.$120,000

b.$30,000

c.$10,000

d.$20,000

Expert Solution

Opportunity cost is the total value of the foregone activity, therefore, in this case Margo could have earned $20,000 by working full time and if she decides to go to college it means she will not have the opportunity to work full time and earn $20,000, therefore, Margo's opportunity cost is $20,000, so the right answer is option D.

Rahul Sunny answered 2 years ago

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