Question

Provide your own definition of “opportunity cost”. Discuss what the opportunity cost of attending college is for you, noting that the concepts of opportunity costs and explicit monetary costs are not the same.

Answer 1

Ans) Opportunity cost is the cost of something that must be given up to get something else. Since there exists Scarcity, one cannot have everything and therefore something must be sacrificed in order to get something else. This sacrifice is opportunity cost.

Opportunity cost = sacrife ÷ gain

For eg- you have 1 hour. You can either play or study. But you cannot choose to do both at the same time. Suppose you choose to play. Therefore, your opportunity cost will be the value of your study time.

Opportunity cost of attending college is the salary that you could have earned from a job instead of studying. Opportunity cost of attending college is your tution fee, which you could have used for any other purpose. Opportunity cost of attending college is the time that you could have allocated for doing something else.