Some College Students Think That Because a College Degree Greatly

question 120

Multiple Choice

Some college students think that because a college degree greatly increases their earning potential there is no opportunity cost of attending college.How would an economist look at the matter?

• A)There is no opportunity cost, assuming that future earnings actually increase as expected.
• B)The opportunity cost is much less than it would appear, assuming that earnings increase.
• C)Opportunity cost is a meaningless concept in this situation.
• D)The college students are completely correct in all respects.
• E)There is still an opportunity cost, even if it is justified by higher future earnings.

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Definitions:

Earnings per Share Growth

An increase in the amount of net income earned per share of stock over a specified period, indicating a company's profitability.

Goodwill Recognition

The accounting process of recording the value of intangible assets acquired through a business combination.

Pooling of Interest

An accounting method for mergers and acquisitions where the assets and liabilities of the combining companies are aggregated.

Synergy

The benefit that results when two or more agents work together to achieve something neither could have achieved on their own.