ECON 2D03 Lecture Notes - Lecture 3: Opportunity Cost, Human Capital
Document Summary
Average yearly cost, 4-year public universities, 2012-13: tuition- ,655, room and board- ,205. Subsidize: gov"t pay(cid:373)e(cid:374)t of so(cid:373)e of the (cid:272)osts of a(cid:374) e(cid:272)o(cid:374)o(cid:373)i(cid:272) a(cid:272)tivity. Investment in human capital: spending designed to improve the productivity of people. Median: the value that is exactly in the middle of a list of all values of some variable, such as earnings, when ranked from highest to lowest. Increased earnings after graduation: expected costs, direct cost, actual paid expenses, tuition & fees, books & supplies. Indirect cost: opportunity cost of forgone alternatives (earnings) Cost-benefit analysis: compares the costs and benefits of a policy or program. Rate of return: the (cid:862)(cid:271)e(cid:374)efit rate(cid:863, divide the net benefit by the amount invested. Justifications: spillover benefits (positive externalities, equal access to education, most of the students we are subsidizing are not from poor families, decreasing federal and state support.
