If the state of New York allocates additional spending on after-school programs for at-risk youths, then the opportunity cost of these expenditures is:
A)zero, if the state is running a budget surplus.
B)the dollar amount of the additional spending.
C)relevant only if taxes must be raised to fund the spending.
D)the value of alternative expenditures forgone in making this allocation.

Question

Quizplus · Accepted Answer

Opportunity cost is the value of the best alternative forgone. When the state allocates additional spending on after-school programs, it means that they have to use resources that could have been used for other purposes such as building infrastructure or healthcare. Thus, the opportunity cost of this expenditure is the value of alternative expenditures forgone.

If the State of New York Allocates Additional Spending on After-School