Answer to Question #2715 in Microeconomics for Lanina

Question

Suppose you currently earn 30,000 a year. you are considering a job that will increase your lifetime earnings by 300,000 but that requires an MBA. The job will mean also attending business school for two years at an annual cost of 25,000 per year. you already have a bachelor's degree, for which you spent 80,000 in tuition and books. which of the above information is relevant to your decision whether to take the job?

Answer 1

Level of increasing of my earnings and costs, which I must spend on business school for two years are relevant to my decision about accepting work. When I choose what to do, I should compare advantages and disadvantages. My advantage is increasing of my earnings; my disadvantage is business school tuition. If my advantages exaggerate my disadvantages, I will take this job. In the opposite case I will refuse. In this case my earnings will increase by 300,000 and business school tuition for two years is 25,000*2=50,000. Earnings > tuition, so I will take the job. Other mentioned in the task information is not relevant to my decision.