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:

Current Assets

Resources anticipated to be turned into cash, sold off, or used up within a year or over the course of the operational cycle, depending on which period extends further.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year.

Accounts Receivable Turnover

A financial metric that measures how many times a company collects its average accounts receivable balance within a specific period.

Preceding Year

Refers to the year that immediately comes before the current year.