I made a choice to attend Indiana State University. By doing so, I had to forego other alternatives. The other best alternative was to stay home and acquire a job. The opportunity cost of attending Indiana State University was the value of the job I would have acquired assuming I cannot work while studying. I have chosen to spend my time in school rather than working. The value of time is an opportunity cost. In this case, it represents a marginal cost. This is the yearly salary I have to undergo to be in school. The foregone employment benefits thus are the opportunity cost of going to university. Going to the University is more productive in the sense that I will be better placed in the job market. The monetary value of the time spent in school however is a cost, which is the opportunity cost of attending the university.

Attending Indiana State University comes with another requirement of buying textbooks. As a student, textbooks are an essential good. You cannot be in school without textbooks. At such, I believe the price elasticity of demand for the textbooks is perfectly inelastic. Whether the price of the textbooks increase or decrease, I have no other choice other than buying them. My demand for the textbooks will not change just because the price of the textbooks changes. Take for example if the price reduced to half the price, I will not buy twice the books required since the benefit derived from the books will not change. Again, if the price increases, I will have to buy the books since I need to derive the benefit in them. A change in price will not change the essential benefit of acquiring the textbooks.