An example of the application of opportunity cost occurs when a government makes the choice between health care spending and military spending.

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In this scenario, the government must decide whether to allocate resources towards investing in the health care system or in the military. Whichever option they choose, there is an opportunity cost - the benefits they could have gained from the not-chosen option. For example, if the government chooses to invest more in the military, they may miss out on potential benefits of investing in the health care system. Conversely, if they choose to invest more in the health care system, they may miss out on potential benefits of investing in the military. This highlights the importance of considering opportunity cost in decision-making.

An Example of the Application of Opportunity Cost Occurs When