Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Archer is considering three options: a gap year to study abroad, open a coffee shop in his home town, and working as an electrician in

Archer is considering three options: a gap year to study abroad, open a coffee shop in his home town, and working as an electrician in his home town. If he takes a gap year to study, he will incur $3,000 in airfare and $5000 for housing (if he does not go abroad, he will live with his parents and will not pay rent). If Archer does not study abroad, he will leave his money in his bank account where he does not earn any interest. If he opens a coffee shop, he will make $50,000. Taking a job as an electrician will pay $80,000.What is the total opportunity cost of Archer studying abroad for that year? Assume that if he does not study abroad, Archer stays in his home town and takes the job that pays more money.

A:$88,800

B: $88,000

C: $588,000

D: $58,000

None of the above.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introductory Econometrics A Modern Approach

Authors: Jeffrey M. Wooldridge

2nd Edition

0324113641, 9780324113648

More Books

Students also viewed these Economics questions

Question

3. It is the commitment you show that is the deciding factor.

Answered: 1 week ago