Question

Question 02: John Jay is a full – time student at a local university. He wants to decide whether he should attend a four- week summer school session, where tuition is $325, or take a break and work full time at a local delicatessen, where he could make as much as $175 a week. How much would going to the summer school cost him from a decision – making standpoint? Compute the opportunity cost in this case. [Max. Marks = 20] Solution:

Answer 1

Answer:

Oppurtunity cost is next best possible use of resources or benefits arisen.

John has two options:

1. Tution fees of 4 weeks from summer scholl = $ 325

2. Take a break and work with $ 175 for each week = $ $ 700 (175 x 4)

If john choosen option 1 then his oppurtunity cost will be $ 700 or If john chhosen option 2 then his oppurtunity cost will be $ 325.