The Opportunity Cost of Working Rather Than Going to School

question 44

Multiple Choice

The opportunity cost of working rather than going to school is

• A) the cost of food and housing.
• B) the cost of clothing and transportation.
• C) zero because the person is earning an income by working.
• D) the higher wages that come with additional education.
• E) the annual wages earned by working.

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Definitions:

Equilibrium Level

The state in an economy or market where supply equals demand, and there is no inherent force to change the price or quantity.

Real Wages

The purchasing power of wages, adjusted for inflation, representing the quantity of goods and services that can be bought.

Consumer Price Index

An index measuring the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

Base Year

The year with which other years are compared when an index is constructed: for example, a price index.