ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Transcribed Image Text:Suppose the following graph shows the earnings trajectory of college-educated workers (orange line) and of workers with only a high school diploma
(blue line), through age 34.
Use the grey quadrilateral (star symbols) to shade the area representing the direct costs of attending college for four years. Then use the purple
quadrilateral (diamond symbols) to shade the area representing the opportunity cost of attending college for four years rather than entering the work
force immediately after completing high school. Finally, use the green quadrilateral (triangle symbols) to shade the area representing the difference in
earnings between college graduates and high school graduates between the ages of 22 and 34.
Hint: Be sure that the coordinates of the end points of the quadrilaterals are exactly the same as the coordinates of the areas they are to cover. Once
the quadrilateral is in place, dick on it to show the value of the shaded area.
?
100
8 8
8
8
EARNINGS AND COST (Thousands of dollars)
8.
8 8 8
-100
18
20
U
RS
24
AGE (Years)
College
High School
30
Direct Costs
Opportunity Cost
Benefits
The previous graph shows that the benefit in earnings from going to college is
while the total cost of going to college is
It is difficult to measure nonmonetary benefits of various jobs, but students who want to maximize monetary benefits
their own human capital.
want to invest in
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