spirit.” The out-of-pocket monetary cost of the event may involve hiring an outside consulting firm to run the

retreat, as well as room and board for all participants. However, an opportunity cost exists as well: during the
two days of the retreat, none of the employees are doing any other work.

Attending college is another case where the opportunity cost exceeds the monetary cost. The out-of-pocket

costs of attending college include tuition, books, room and board, and other expenses. However, in addition,

during the hours that you are attending class and studying, it is impossible to work at a paying job. Thus,

college imposes both an out-of-pocket cost and an opportunity cost of lost earnings.

CLEAR IT UP

What is the opportunity cost associated with increased airport security measures?
After the terrorist plane hijackings on September 11, 2001, many steps were proposed to improve air travel safety.
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