You decide to quit your 40,000 a year job to go back to school. ...

[renzo156]

You decide to quit your 40,000 a year job to go back to school. Your rent is 9,600 per year, you spend 6,000 per year on food, your tuition costs 24,000 per year, and textbooks cost 3,000 per year.
 
  Based on these numbers, what are your yearly explicit and implicit costs of going back to school?

Question 2

When inflation expectations changed during the 1967-1971 period, this change led to
 
  A) the short-run Phillips curve shifting upward.
  B) the short-run and the long-run Phillips curve both shifting upward.
  C) an increase in the natural unemployment rate.
  D) the long-run Phillips curve shifting leftward.
  E) the long-run Phillips curve shifting rightward.

[kxciann]

Answer to Question 1

Your explicit costs include tuition and textbooks, which total 27,000. Your implicit costs involve the salary you give up to go back to school, or 40,000. Since you would be paying rent and buying food whether you continued working or went back to school, these costs are not included in the explicit costs of going back to school.

Answer to Question 2

A

[renzo156]

YES! Correct, THANKS for helping me on my review

[Liamb2179]

Thanks for the timely response, appreciate it