Multiple Choice
Which of the following best describes a limited resource in the context of economics?
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0. Basic Principles of Economics
Scarcity and Choice
Multiple Choice
Which of the following best describes the opportunity cost of going to college?
A
The time spent studying for exams
B
The cost of tuition and textbooks only
C
The total amount of money spent on college-related expenses
D
The value of the next best alternative forgone, such as income from a full-time job
Verified step by step guidance1
Understand the concept of opportunity cost: it is the value of the next best alternative that you give up when making a choice.
Identify all relevant costs associated with going to college, including both explicit costs (like tuition and textbooks) and implicit costs (such as the income you forego by not working full-time).
Recognize that opportunity cost is not just the money spent, but also includes the value of time and other resources that could have been used elsewhere.
Formulate the opportunity cost of going to college as the sum of explicit costs plus the value of the next best alternative forgone, for example, the income from a full-time job you give up to attend college.
Conclude that the best description of opportunity cost is the value of the next best alternative forgone, which encompasses both monetary expenses and the income or benefits lost by choosing college over other options.
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