A policy maker is faced with a dilemma: she can use tax dollars to build either a bridge or a new high school. Which of the following is the opportunity cost of the high school?
A) the cost of construction for the high school
B) the cost of construction for the bridge
C) the value that people place on building a bridge
D) the value that people place on building a high school

Question

Quizplus · Accepted Answer

The opportunity cost of building the high school is the value of the next best alternative that is foregone, which in this case is the value that people place on building the bridge.

A Policy Maker Is Faced with a Dilemma: She Can