After Three Years at an Expensive College, Pierre Realizes That

question 50

Essay

After three years at an expensive college, Pierre realizes that he doesn't want to finish school but really wants to be a chef.When Pierre suggests that he leave college for culinary school, his parents insist that he stay for one more year to get his degree.Which of the following is true?
A.Pierre's parents are correct: if he leaves college, it is as though he has wasted three years of tuition.
B.Pierre's parents are wrong: the marginal benefit to Pierre of another year of college is less than the marginal cost of college.
C.Pierre's parents are wrong: the marginal benefit to Pierre of another year of college is greater than the marginal cost of college.
D.It is impossible to tell who is correct.

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Definitions:

Raw Material Purchases

The total cost of materials bought that are intended to be used in the production of goods.

Cost of Goods Sold

The immediate expenses linked to the manufacturing of products that a company sells.

Sales Forecast

An estimate of the quantity of goods or services that an organization expects to sell in a particular period.

Raw Material Purchases Cost

The total amount spent on buying raw materials necessary for production.