Copyright

Michelle Wie, a teenage golf prodigy who earned $16 million in endorsements and $4 million in...

Question:

Michelle Wie, a teenage golf prodigy who earned {eq}\$16 {/eq} million in endorsements and {eq}\$4 {/eq} million in prize money and appearance fees in 2006, announced that she would enroll as a student at Stanford University in the fall of 2007. What was her opportunity cost of a year of college?

Opportunity costs

Opportunity cost defined as the benefits lost when a person chooses one alternative over another alternative. In other words, it is the "cost" incurred by not choosing the benefits involved with the nest best alternative option.

Answer and Explanation:

In this case, If Michelle Wie choose to get enroll as a student at Stanford University, She has to sacrifice the income of $16 + $4 = $20 which she could have earned in 2007.

Thus, her opportunity cost of a year of college is $20.


Learn more about this topic:

Loading...
How to Calculate Opportunity Cost

from Economics 102: Macroeconomics

Chapter 1 / Lesson 3
353K

Related to this Question

Explore our homework questions and answers library