Suppose You Plan to Go to School This Summer

question 27

Essay

Suppose you plan to go to school this summer. The cost of tuition and textbooks is $1,400 and housing, board, and entertainment will cost you $500. If you didn't go to school, you'd live in your parents' house for free, but your other living expenses would be about the same. Also, if you didn't go to school you'd work full time and could earn $8,000. You can still work part time while attending the summer school, but you will earn only $3,000.
a) What will the summer school cost you in terms of money explicitly paid?
b) What are the opportunity costs of going to summer school that you don't pay explicitly? Explain.
c) What is your total opportunity costs of going to school this summer? Explain your answer.

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Definitions:

Frustration of Purpose

A legal defense allowing for the termination of a contract when an unexpected event undermines the contract's core purpose.

General Contract Law

The body of law that governs the formation, execution, and enforcement of agreements between parties.

Right of Inspection

The legal right to examine and review a company's books, records, and documents, typically granted to directors, officers, and shareholders.

Nonconforming Goods

Goods that fail to meet the specifications or standards outlined in a contract.