1 Answer | Add Yours
Everything that we do has an opportunity cost. That is because every time we choose to do one thing, we are not able to do something else with our time and other resources. The opportunity cost that we incur when we choose Action X is the value of whatever we would have done if we had not taken Action X.
In the example of your college degree, the opportunity cost is the value of whatever you would have done with those four years if you had not gone to college. The opportunity cost will vary between people because different people would have done different things had they not gone to college. So, if you would have worked at a job that paid $30,000 per year your opportunity cost would be $120,000. The opportunity cost would also include anything else (such as travelling, getting married, or what have you) that you would have done if you had not been busy taking classes.
So, to answer this, you have to figure out what you would have done if you had not been going to college. This would be your opportunity cost.
We’ve answered 317,752 questions. We can answer yours, too.Ask a question