Wages or salaries that are lost as a result of attending college instead of working represents

Wages or salaries that are lost as a result of attending college instead of working represents

• A. Opportunity cost
• B. Sunk cost
• C. Fixed cost
• D. Variable cost

Answer: (A)

Opportunity cost is the value of the next best alternative you give up when you choose one option over another. In this case, deciding to attend college means you forego wages you would have earned by working instead. That foregone income represents the opportunity cost of going to college. It isn’t money you’ve spent or a cost tied to producing something, so it isn’t a sunk, fixed, or variable cost.

Opportunity cost is the value of the next best alternative you give up when you choose one option over another. In this case, deciding to attend college means you forego wages you would have earned by working instead. That foregone income represents the opportunity cost of going to college. It isn’t money you’ve spent or a cost tied to producing something, so it isn’t a sunk, fixed, or variable cost.