Question

The British government introduced legislation in 2012 that gave universities the option to raise their tuition fees. Most chose to increase annual tuition fees for students from $3,000 to $9,000. Does this mean that the cost of going to university has tripled? (Think about how an accountant and an economist might answer this question. To simplify, assume that the tuition fee is an ‘out of pocket’ cost. Ignore student loans.)

Answer 1

It can actually be mentioned that from the point of view of an accountant the money is actually tripled from $3,000 to $9,000 because it is the only cause that is increasing to you but when it comes to the case of an economist it is not exactly tripled because the explicit cost is actually triple but the implicit cost which is the opportunity cost remains the same where the opportunity cost is nothing but the cost of next best alternative and therefore the total cost which is the sum of explicit and implicit cost might increase but not tripled and may be less than that and therefore can we mentioned that from The economist point of view the fees is not exactly triple