Suppose two young people graduate from high school. One start working immediately and earns $1500 per month. The other continues his education for 7 years to train as a physician, costing him $18,000 per year. After graduation, the second student earns $5,000 per month at his new job. How long will it take the second student to make up the cost of his education and surpass the first student financially? After this calculation, explain why considering explicit costs alone is not an accurate representation of the reality of economic costs.

Suppose two young people graduate from high school. One start working immediately and earns $1500 per month. The other continues his education for 7 years to train as a physician, costing him $18,000 per year. After graduation, the second student earns $5,000 per month at his new job. How long will it take the second student to make up the cost of his education and surpass the first student financially? After this calculation, explain why considering explicit costs alone is not an accurate representation of the reality of economic costs.

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter7: Production, Inputs, And Cost: Building Blocks For Supply Analysis

Section: Chapter Questions

Problem 9TY

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