When the government chooses to use resources to build a dam, these sources are no longer available to build a highway. This choice illustrates the concept of

Question

Quizplus · Accepted Answer

The choice to build a dam instead of a highway means that the opportunity cost of building the highway is the resources that were used to build the dam. This concept is known as opportunity cost, which refers to the cost of not choosing a different option. This scenario does not involve a fallacy of composition or a market mechanism, and while it may have implications for macroeconomics, this concept is not directly relevant to the scenario presented.

When the Government Chooses to Use Resources to Build a Dam