Final answer:
Dropping out of college would result in the loss of both the tuition paid and potential income earned during those years. These costs are considered opportunity costs.
Step-by-step explanation:
True. Dropping out of college would result in the loss of both the tuition paid and the potential income that could have been earned during those years of attending college. These costs are considered opportunity costs because they represent the value of the best alternative use of the money spent on tuition and the time spent studying instead of working.
The idea of sunk costs is not relevant here because you cannot change or recover the tuition paid or the income lost. Therefore, option B is incorrect.
Dropping out of college involves sunk costs, which are past expenses on tuition that are not recoverable and should not influence future decisions. Opportunity costs of potential earnings lost while in college become relevant when considering whether to continue or leave. The answer is d: False, the costs are sunk and not relevant to the decision.
When considering whether dropping out of college will cost you all of the tuition paid and the income you could have earned, it's crucial to understand the concept of sunk costs and opportunity costs. Tuition fees, books, room and board are sunk costs once paid; they can't be recovered. However, they should not influence the decision to stay or leave since they are in the past. Conversely, the opportunity cost refers to the potential earnings lost while attending college instead of working. If you decide to drop out, the future earnings you could gain by entering the workforce sooner become relevant to your decision, unlike the sunk costs.
Therefore, the answer to the question is d. False. I did pay these costs, but they are sunk and thus not relevant to the decision. The future opportunity costs of earnings forgone by staying in college, however, may be considered when making the decision to drop out.