Question $4(6$ points$)$

Kai is considering leaving his job as a program manager to attend a graduate program.

List the costs that should be considered as opportunity costs and those should NOT be

considered as opportunity costs.

Question $5(6$ points$)$

A company has invested significant funds into building a new subway line in City A$.$ A

risk analysis conducted by a research institute recently estimated that the project may

experience cost overruns by up to $$5$ billion, which is more than originally estimated.

The CEO of the company needs the Board to approve additional funding to finish the

project. Indicate whether the CEO's statement is economically valid or invalid. Explain

your answer if you think the statement is invalid.

a$."$We have already invested a significant amount of time and money, so we cannot abandon

the project now.

b$."$We should continue with the project because the expected benefits to finish it exceed the

remaining costs."