One of the biggest choices I have had to make in my life was deciding on if I wanted to go to college or not, and also where I wanted to go. This choice was a big decision for me and it required me to think a lot about my future and how my decision would impact myself and others. These things are the costs of making ant type of decision. The four types of costs are accounting, opportunity, transaction and social.
The first type of cost is the accounting cost. Like the name suggests this costs has to do with money. The accounting cost is the physical amount of money that a decision will cost. Goods and services costs money and so does education. To me going to college had a high accounting cost because I had to pay money. This includes tuition, fees, books, school supplies, transportation, and other expenses. Each of these things would cost me money and it was my major deciding factor in deciding to go to college. On of the ways that I could reduce the accounting cost was to attend a community college where the tuition was lower. That was partly why I chose Finger Lakes Community College.
The second type of cost is the opportunity cost. This cost is all about giving up things. For me to go to college I would have to give up a lot more then money. I would have to give up my time. I would have to spend my time in class, studying, doing homework and the time to drive from Rochester to Canandaigua. I would have to give up this time when I would normally be doing other things. I gave up working, sleeping, watching television, spending time on the internet, spending time with family, and spending time with friends. All could have done all these things instead of going to school.
The third type of cost is transaction cost. This cost is all about what you give up in time, resources, or money while trying to make the actual decision. This cost is also about the middlemen in the decision. For example, for my decision the middlemen were the people at FLCC. When I was trying to make a decision I spend time talking to my high school guidance counselors and researching about FLCC and other schools on the internet. I also spend time talking to representatives from the college and reading pamphlets about the school. I spent money when I filled out an application and paid for the stamp to mail it with. These things were all transactions costs. I also dealt with the college itself and the middlemen.
The last type of cost is the social cost. Like the name suggest this cost is all about how the decision made impacts the entire society. If I went to college and graduated with a degree I would be helping society. I would be helping to contribute my newly learned knowledge. I would be contributing intelligence and experience. If I did not go I would not be contributing to society.
I took into account all of these cost and looked the expected utility. Considering all of these costs would I be happy with a decision to go to college or would I be satisfied with the decision of not going to college? Were any of the costs too high for me? I made the final decision to go to college. For me each of the fours costs combined was less then what I was hopping to get out of it in the end. I was expecting to come out on top despite the costs.