The Governor of your state has cut the budget for the University and increased spending on Medicaid. This is an example of:

Question

Quizplus · Accepted Answer

This decision reflects the concept of choice in the face of limited resources. The Governor had to make a trade-off between allocating funds to the University and Medicaid, with limited resources available in the state budget. The choice made prioritized spending on Medicaid over the University. It is not necessarily a reflection of poor normative or positive economic decision making, as these terms refer to the value judgments and empirical analysis of economic decisions, respectively. Additionally, the concept of average vs. marginal costs does not apply in this scenario as it pertains to analyzing incremental costs, not budget allocation decisions.

The Governor of Your State Has Cut the Budget for the University