Suppose after graduating from college you get a job working at a bank earning $30,000 per year.After two years of working at the bank earning the same salary,you have an opportunity to enroll in a one-year graduate program that would require you to quit your job at the bank.Which of the following should not be included in a calculation of your opportunity cost?
A)the cost of tuition and books to attend the graduate program
B)the $30,000 salary that you could have earned if you retained your job at the bank
C)the $45,000 salary that you will be able to earn after having completed your graduate program
D)the value of insurance coverage and other employee benefits you would have received if you retained your job at the bank

Question

Quizplus · Accepted Answer

The opportunity cost should include the costs and benefits foregone by choosing one option over another. The $45,000 salary after completing the graduate program is a future benefit, not a cost of the decision to leave the job, and thus should not be included in the opportunity cost calculation.

Suppose After Graduating from College You Get a Job Working