The concept of opportunity cost ?
Correct answer: B. Suggests a major increase in public health care spending means an expansion in other areas will be harder to achieve.
- A. is relevant only for a capitalist economy like the United States.
- B. Suggests a major increase in public health care spending means an expansion in other areas will be harder to achieve.
- C. Suggests all our wants can be achieved.
- D. Would be relevant if we eliminated poverty
Explanation
Opportunity cost means that choosing one use of scarce resources sacrifices the next-best alternative. More public health spending therefore leaves fewer resources for other government priorities, making expansion in those areas harder.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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