andrew quits his job as an accountantwhere he earns $45000 per year to go back to scool for 2 years to get an NBA degree. He attends a school that charges $25000 per year for tuition & related expenses. How much is the total cost (explicit plus opportunity) of that degree?
will someone PLEASE answer this question?? :)
5000
To calculate the total cost of Andrew's degree, we need to consider both explicit costs (tuition and related expenses) and opportunity costs (foregone earnings).
1. Explicit Costs:
Andrew attends school for 2 years, and the tuition and related expenses are $25,000 per year. Therefore, the explicit cost of the degree is:
2 years * $25,000/year = $50,000
2. Opportunity Costs:
Andrew was earning $45,000 per year as an accountant. If he quits his job to go back to school for 2 years, he will lose this income. Therefore, the opportunity cost is:
2 years * $45,000/year = $90,000
3. Total Cost:
To find the total cost, we sum up the explicit and opportunity costs:
$50,000 (explicit cost) + $90,000 (opportunity cost) = $140,000
Hence, the total cost (explicit plus opportunity) of Andrew's degree is $140,000.