Opportunity cost as forgone net earnings

Steps:

• Identify the alternative: unskilled job pays $16,000 per year for two years, totaling$32,000.
• Calculate earnings during apprenticeship: $10,000 per year for two years, totaling$20,000.
• Determine forgone net earnings: $32,000 -$20,000 = $12,000.
• This represents the opportunity cost of the two years, ignoring future benefits.

Why B is correct:

• Opportunity cost is the net value of the best alternative forgone, calculated as (alternative earnings - actual earnings) over the period.

Why the others are wrong:

• A: Ignores the full two-year period and alternative pay.
• C: Confuses with post-apprenticeship earnings, not the two-year cost.
• D: Overstates by using gross alternative earnings without subtracting apprenticeship pay.

Final answer: B