Skip to main content

What is the opportunity cost of a person going to a university?

An opportunity cost is the cost you incur when you choose one path and forego another.  So, what needs to be examined is what path you are foregoing to go to school. Assuming that you would work instead, your opportunity cost is the wages you would earn if you chose to work, rather than attending school.  This could amount to a substantial sum of money, but there needs to be more to your consideration of...

An opportunity cost is the cost you incur when you choose one path and forego another.  So, what needs to be examined is what path you are foregoing to go to school. Assuming that you would work instead, your opportunity cost is the wages you would earn if you chose to work, rather than attending school.  This could amount to a substantial sum of money, but there needs to be more to your consideration of this issue.  Let's assume that you will attend and graduate college in four years and that you could earn $25,000 per year if you worked instead.  That would be $100,000 that you would earn if you chose not to go to school. You would also most likely have to spend money to attend a university, which can be expensive. If you go to school instead of working, statistics tell us that you are likely, when you graduate, to earn far more per year, almost double the earnings.  If you have a forty-year work life, assuming no raises over the period of your career, your earnings would be $50,000 x 40, which would be $2,000,000.  If you forego university and work instead, you will have $25,000 x 44, for the four extra years you would have worked, which equals $1,100,000.  Even with the high costs of tuition and other educational expenses, you make a lot more money long-term by attending college.  There is what seems to be a big short-term opportunity cost to attend and pay for school, but a very large long-term opportunity cost to forego an education.  This is a very simplified model, not accounting for the exact costs of attending school or the fact that regular pay raises will compound the higher wage base far more than the lower wage base, but it should help you understand the concept of opportunity cost. 

Comments

Post a Comment

Popular posts from this blog

How and why does James Gatz become Jay Gatsby? Describe the young Gatsby/Gatz.

James Gatz, a poor Midwestern boy of probable Jewish lineage, becomes Jay Gatsby, a presumed WASP and wealthy socialite, when he moves to New York City and acquires his fortune. It is wealth that has allowed Gatz to transform himself into Gatsby. However, those who know his background (e.g., Daisy and Tom Buchanan) never allow him to forget that he is nouveau riche -- that is, an upstart who has just recently made his fortune,... James Gatz, a poor Midwestern boy of probable Jewish lineage, becomes Jay Gatsby, a presumed WASP and wealthy socialite, when he moves to New York City and acquires his fortune. It is wealth that has allowed Gatz to transform himself into Gatsby. However, those who know his background (e.g., Daisy and Tom Buchanan) never allow him to forget that he is nouveau riche -- that is, an upstart who has just recently made his fortune, whereas they arose from well-to-do families. Gatz became Gatsby through determination and discipline. At the end of the novel, the narr...
Post a Comment
Read more

What gift did Della buy for Jim and why in "The Gift of the Magi" by O. Henry?

Della buys Jim a watch fob because his watch is his most prized possession. Della and Jim Young do not have much money. Despite this, Della really wants to buy Jim a good Christmas present. She is even willing to sell her hair to get him a nice gift. This is ironic because we learn Della and Jim both highly prize her hair. Now, there were two possessions of the James Dillingham Youngs in which... Della buys Jim a watch fob because his watch is his most prized possession. Della and Jim Young do not have much money. Despite this, Della really wants to buy Jim a good Christmas present. She is even willing to sell her hair to get him a nice gift. This is ironic because we learn Della and Jim both highly prize her hair. Now, there were two possessions of the James Dillingham Youngs in which they both took a mighty pride. One was Jim's gold watch that had been his father's and his grandfather's. The other was Della's hair.  Della is still willing to sell her hair so she can b...
Post a Comment
Read more

Explain and discuss how the definitions of freedom change for the nation, for the freedmen and for southern whites after the Civil War.

After the Civil War, the definition of freedom changed in the nation, as slavery was ended with the 13th Amendment to the Constitution in 1865. The practice of slavery was disallowed, but definition of the freedom that would take its place was a subject of controversy, ongoing debate, and even violence in the decades to come.  For freedmen, freedom often meant reconciling with their families, who were broken up by slavery; choosing which church to... After the Civil War, the definition of freedom changed in the nation, as slavery was ended with the 13th Amendment to the Constitution in 1865. The practice of slavery was disallowed, but definition of the freedom that would take its place was a subject of controversy, ongoing debate, and even violence in the decades to come.  For freedmen, freedom often meant reconciling with their families, who were broken up by slavery; choosing which church to belong to without being ordered to attend religious services (or not to attend) by their mast...
Post a Comment
Read more