Texes Social Studies Content Practice Exam

Which of the following is NOT an example of opportunity cost?

1. The leisure time sacrificed to study for an exam

2. The income which could have been earned by a college student had he or she worked full time instead of attending college

3. The tuition fees paid to a university

4. The building which could have been built with the construction materials and labor used to build a new university library

The correct answer is: The tuition fees paid to a university

Tuition fees paid to a university represent a direct expenditure rather than a measure of what is foregone as a consequence of a choice, which is the essence of opportunity cost. Opportunity cost is the value of the next best alternative that is not chosen when making a decision. In contrast, the other examples illustrate the concept effectively. For instance, sacrificing leisure time for study represents the value of free time that could have been spent on recreation or relaxation, which is a missed opportunity. Similarly, the potential income that could have been earned if a student chose to work full time rather than attending college highlights the income that is foregone because of the choice to pursue education. Lastly, the opportunity cost associated with the building materials and labor used for the university library points to the alternative projects that could not be undertaken due to the allocation of resources to construct the library. Therefore, the tuition fees, while a cost of attending college, do not fit the definition of opportunity cost, as they do not represent a foregone alternative but rather an expenditure incurred as a result of the choice to invest in education.