Asked by Siqian Chang on Jul 22, 2024
Verified
Chloe's college raises the cost of room and board per semester. This increase raises Chloe's opportunity cost of attending college
A) even if the amount she would have to pay for room and board if she didn't attend college rose by the same amount.An increase in opportunity cost reduces Chloe's incentive to attend college.
B) even if the amount she would have to pay for room and board if she didn't attend college rose by the same amount.An increase in opportunity cost increases Chloe's incentive to attend college.
C) only if the amount she would have to pay for room and board if she didn't attend college rose by less than the increase in the amount her college charges.An increase in opportunity cost reduces Chloe's incentive to attend college.
D) only if the amount she would have to pay for room and board if she didn't attend college rose by less than the increase in the amount her college charges.An increase in opportunity cost increases Chloe's incentive to attend college.
Opportunity Cost
The cost of foregoing the next best alternative when making a decision or choosing to pursue a particular action.
Incentive
An incentive is a motivational factor or reward that encourages people to perform an action or adopt a behavior.
Room And Board
A combination of housing (room) and meals (board) typically provided as part of compensation or in a collegiate setting.
- Understand the concept of opportunity cost and how it influences individual decisions.
Verified Answer
CR
Candice RobinsonJul 27, 2024
Final Answer :
C
Explanation :
Option C is correct because opportunity cost is the cost of the next best alternative foregone. If the cost of room and board increases more for college than for the alternative (not attending college), then the opportunity cost of attending college increases, making it less attractive compared to the alternative. This reduction in attractiveness translates to a reduced incentive to attend college.
Learning Objectives
- Understand the concept of opportunity cost and how it influences individual decisions.