Opportunity Cost of Getting a Degree

Opportunity Cost of Getting a Degree

What is your opportunity cost of getting a degree? Think about these questions:

  • What is the benefit/satisfaction of the next best thing forgone?
  • Would you have paid tuition and school related expenses if you had done the next best thing?
  • Is opportunity cost of getting a degree the value of the next best forgone alternative or the sum of ALL the alternatives?
  • What is the difference between cost and opportunity cost of getting a degree

 

  1. What is Opportunity Cost of Getting a Degree
What do you have to pay when you are in school which you would have not if you worked? Would this cost be included? Amount Items affecting your opportunity cost of getting a degree
Tuition Yes             No $10,000  
Books Yes             No $1,000  
Clothing Yes             No $1,000  
Food Yes             No $1,000  
What else are you sacrificing? If you had worked, would you have made any wages? Yes             No $20,000  
 

Total Cost

 

     

 

  1. What is Opportunity Cost of Watching a Movie

You purchased a sweater for $100 because the winter is approaching and it is cold. You were planning to go to the movies and you want to measure your cost of going to the movies.

Price of the Ticket = $20

Your hourly wage = $10

Movie is 2 hours

Opportunity Cost of watching the movie _____________

 

 

You value this movie up to $30 due to the satisfaction it gives you and you know if you wait one week, you will watch it in Netflix. Will you go to the movies?

 

Benefit ______________________   Cost____________________   Decision _______________