📚 Learning Guide
Opportunity Cost Analysis
medium

If producing more consumer goods (A) requires sacrificing some capital goods (B), then producing more education (C) would require sacrificing which of the following (D)?

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Question & Answer
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Choose the Best Answer

A

Healthcare services

B

Recreational activities

C

Infrastructure development

D

Both A and C

Understanding the Answer

Let's break down why this is correct

Answer

When we talk about opportunity cost, we mean what we give up to get something else. If producing more consumer goods, like toys or clothes, means we have to use some of our resources that could have made capital goods, like factories or machines, we see a trade-off. Similarly, if we want to produce more education, which can be thought of as investing in schools and teachers, we might have to sacrifice other services or goods that could have been produced instead. For example, if a city decides to build a new school, it might have to reduce spending on road repairs or public parks. This shows that every choice we make comes with costs, and we need to consider what we are giving up when we decide to invest in something like education.

Detailed Explanation

Choosing to invest more in education means we have less money for other things like healthcare and infrastructure. Other options are incorrect because Some might think healthcare is unrelated to education; Recreational activities seem separate from education.

Key Concepts

Opportunity Cost
Resource Allocation
Trade-offs
Topic

Opportunity Cost Analysis

Difficulty

medium level question

Cognitive Level

understand

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