The concept of opportunity cost

Question

Quizplus · Accepted Answer

The concept of opportunity cost suggests that when resources are limited, choosing to allocate resources towards one option means giving up the opportunity cost of the next best alternative. In this case, increasing spending on public education will mean giving up some expansion in the public healthcare system, as some resources will need to be allocated towards education rather than healthcare. This is a microeconomic concept that applies to both developed and developing countries.

The Concept of Opportunity Cost