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Soru

Zorluk: OrtaScarcity and Choice

A local government council has a fixed capital budget of ₦50 million and must choose between constructing a township road network and rebuilding a community healthcare center. If the council resolves to rebuild the healthcare center, what is the real cost of this economic decision?

  1. The township road network that was foregoneCevap
  2. B
    The financial outlay of ₦50 million spent on the healthcare center
  3. C
    An outward shift of the local government's production possibility curve
  4. D
    The total satisfaction gained by community members from improved healthcare

Cevap

The township road network that was foregone
In economic analysis, real cost (or opportunity cost) refers to the real goods or services given up in order to obtain something else. By selecting the healthcare center, the local government sacrificed the opportunity to construct the township road network, making the foregone road network the real cost of the decision.

Adım Adım Çözüm

1
Identify the scarce resource and competing alternatives
Resource is ₦50 million budget; alternatives are township road network vs community healthcare center.
Scarcity of resources necessitates making a choice between alternative uses.
2
Distinguish between money cost and real cost
Money cost is ₦50 million, while real cost is the sacrificed alternative (the township road network).
In economics, real cost is expressed in terms of the next best alternative foregone, not monetary expenditure.

Anahtar Kavram

Money Cost versus Real Cost
Bu soruyu puanla

Konular

Scarcity and Choice

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