Question

After graduating from high school, Peggy Smith decided to enroll in a two-year program at the local community college rather than to accept a job that offered a salary of $12,000 per year. If the annual tuition and fees are $4,600, the annual opportunity cost of attending the community college is


$4,600


a

$7,400


b

$12,000


c

$16,600


d

$24,000

Answer 1

Opportunity cost = forgone wage + tuition = $12,000 + $4,600 = $16,600 per year.

Answer: d ($16,600)