The choice to attend an economic class
The choice to attend an economic class has both advantages and disadvantages. Choosing to attend college requires a student to decide on trade-offs implying that it entails both costs and benefits. The various problems include opportunity costs, marginal costs, implicit and explicit costs. Similarly, there are marginal benefits related to knowledge acquisition, which provides the primary importance of attending any college course.
Opportunity costs can be defined as the cost incurred while attending the economic class in comparison to doing another activity. Therefore, arguably, attending an economic class was costly in terms of tuition fees as well as the associated expenses. The expenses include the purchase of stationery and study materials, as well as the loss of income. Hence, the opportunity cost comprises both explicit and implicit costs. The original prices are the expenses directly linked to attending the economic class, such as the tuition fees. At the same time, explicit costs are indirectly related to class attendance, such as transport and food.
Marginal cost is the expenses that would be incurred by seeking extra support in a bid to attain the full benefits of the economic class. The main marginal cost that I incurred includes hiring a personal tutor or purchasing additional notes to complement lecture notes. On the other hand, marginal benefits are associated with extra satisfaction, which results from attending an economic class. The benefits include the acquisition of knowledge to minimize personal expenses.
Failure to attend the class has some costs which are deducted from the wasted tuition fees. The loss in fees occurred due to the unattended courses that I would incur by skipping the classes. Also, the other related costs originated from the lack of knowledge to manage personal expenses such as taking alternatives to the means of transport.
Attending the economic class also entailed some sunk costs. The sunk cost is the expenses that cannot be recovered or directly benefit the students. The sunk costs involve the statutory, registration, or subscription renewal of the course. Also, the fees lost due to class in-attendance can be categorized as sunk costs.
Nevertheless, attending the class was an economically sound decision. The knowledge I acquired from economic education is quite useful in planning my budget, which helps in cutting on expenses, which may result from impulse buying and poor decision making. Besides, the decision to attend the economic class was economically rational since the benefits attributed to the acquired knowledge is useful in daily business activities. Moreover, the net worth of the benefits surpasses the total costs of the incurred expenses for the economic class. The table below shows the various costs and benefits of attending the economic class.
Costs Per Year
Opportunity costs
Implicit costs
Tuition fees
$ 1440
Stationery Purchase
$ 240
Explicit Costs
Transport
$ 180
Food
$ 120
Marginal costs
Extra Tuition by a tutor
$ 600
Extra notes
$ 120
Sunk costs
Statutory fees
$ 120
Registration fees
$ 240
Subscription renewals
$ 120
TOTAL
$ 3900
Benefits Per Year
Marginal Benefits
Minimization of expenses.
Saving by avoiding impulse purchases
Stationery
$ 60
Transport
$ 60
Extra Tuition
$ 360
Food
$ 60
Extra notes
$ 120
Earning
Estimated earning through employment or business
$ 12000
TOTAL
$ 12660
References
Carneiro, P., Heckman, J. J., & Vytlacil, E. J. (2011). Estimating marginal returns to education. American Economic Review, 101(6), 2754-81.
Paulsen, M. B., & Smart, J. C. (2001). The finance of higher education. New York.
Sculpher, M., Claxton, K., & Pearson, S. D. (2017). Developing a value framework: the need to reflect the opportunity costs of funding decisions. Value in Health, 20(2), 234-239.