Question

Why should we include foregone earnings in our calculation of the "true cost" of attending college?

Answer 1

Answer - The foregone cost or in other words the opportunity cost is the cost which we sacrifice in order to choose other alternative. It is helpful in determining the actual cost or the cost in real terms of choosing an alternative over the other. F the foregone cost will not be considered , the evaluation of the benefit or the loss will be done correctly. Hence the choosing of the attending the college , may result in sacrificing a job giving greater returns. Hence , the foregone cost are also necessary in decision making.