Consider the following dialogue between Raphael, a student in an introductory economics class, and Raphael's teaching assistant, Tim.

RAPHAEL:Hi, Tim. This is my first economics course, and many of the concepts discussed in class are really confusing. Today the professor explained that the true cost of going to college includes both the tuition I pay as well as something called the "opportunity cost" of going to college. I don't understand. I pay $32,000 per year in tuition. The tuition is what I pay to the school, so it seems like that should be my true cost!

TIM:Hi, Raphael. Many concepts in economics can be confusing at first. Let's talk it through.

Economists think of costs a bit differently than just the dollar amount that you pay. To an economist, the true cost of college includes the total value of what you give up in order to acquire your college education. In other words, not only did you give up the tuition money that you paid, but by attending college, you gave up opportunities to do other things with your time as well. This is where the idea of opportunity cost comes from.

The opportunity cost of your decision to go to college is the value of the next best alternative that you gave up. Suppose that your next best alternative to college is to work as a cashier. By not going to college, and taking this job, you could earn $16,000 per year. Then your opportunity cost of college is $_______(fill in blank) , and your total cost of a year of college is _________(choices: $16,000, $48,000, $32,000).

RAPHAEL:I think I get it now. So when I take into account the opportunity cost of college, the true cost is actually _________ (choices: lower, higher) than just the tuition.

TIM:Correct. Thinking about costs in this way will help you make more rational decisions in your everyday life. Now tell me, how can you explain your decision to go to college?

RAPHAEL:I chose to go to college because, for me, the value of a year in college _______ (choices: falls shot of the total cost, exceeds the total cost, falls short of the opportunity cost).

The following graph approximates business cycles in the United States from the first quarter of 1955 to the third quarter of 1959. The vertical blue bar coincides with a period of six or more months of declining real gross domestic product (real GDP).

? 2800 2700 2600 REAL GDP (Billions of dollars) V 2500 2400 1955 1956 1957 1958 1959 YEAR Source: "Current-Dollar and Real GDP," Bureau of Economics Analysis, last modified May 1, 2013, accessed May 15, 2013, http://www.bea.govational /xls/gdplev.xls