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Consider frank's decision to go to college. If he goes to college, he will spend $21,000 on tuition, $11,000 on room and board, and $1,800 on books. If he does not go to college, he will earn $16,000 working in a store and spend $7,200 on room and board. Given this information, frank's cost of going to college is

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pristina

Answer: Franks cost of going to college is $42,600.  

Explanation: Franks total cost of going to college will include his tuition fees, the money he spends on room and books as well his opportunity cost of going to college. Opportunity cost of going to college is the lost income that he could have earned by working.  


[tex]Franks cost = Tuition Fees + Room and board charges + Cost of books + Opportunity cost


=$21,000 + $11,000 + $1,800 + ($16,000 - $7,200)


= $49,800 - $7200


= $42,600[/tex]


jepessoa

Answer:

$42,600

Explanation:

Frank's economic cost of going to college includes:

  • all the accounting costs of going to college: $21,000 on tuition, $11,000 on room and board, and $1,800 on books = $33,800
  • the net opportunity cost of not going to college: the wages that Frank will lose because he is attending college and cannot work = his $16,000 salary - $7,200 spent on room and board = $8,800

Frank's economic cost of going to college = total accounting costs + net opportunity costs = $33,800 + $8,800 = $42,600  

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