7. Mr Slumber Kotoko was a full-time employee of Bank of Botswana earning P200, 000.00 per...

7. Mr Slumber Kotoko was a full-time employee of Bank of Botswana earning P200, 000.00 per year when he decided to enrol for a four year course at the University of Botswana. He can only earn P70 000.00 per year as a part time worker. What is the opportunity cost of going to University for Mr Kotoko over the four year period

Solutions

Expert Solution

opportunity cost = value of benefit forgone by choosing an alternative

=> opportunity cost of going to university = value of benefit forgone by not being a full-time worker

= (salary as full-time employee - salary as part-time worker)

= 200000 - 70000

= 130000

Over the course of 4 years = 4*130000 = P520000

Rahul Sunny answered 1 year ago

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