Answer to Question #192181 in Microeconomics for Ain Amira

Question

it is estimated that more than 2000 students will apply mba in malaysia this year. using the concept of net present value (npv) and opportunity cost, explain when it is rational for an individual to pursue the mba program

Answer 1

The amount of benefits received from attending school minus the opportunity cost of attending school instead of doing anything else is the net present value of students applying to top M.B.A programs in Malaysia. When a student's net present value is greater than the opportunity cost or when their net present value is greater than the opportunity cost, it makes sense for them to seek an MBA.