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The Irish government invests significant amounts of taxpayers' money in Irish third level education which involves an opportunity cost - Leaving Cert Economics - Question 6 - 2017
Question 6
The Irish government invests significant amounts of taxpayers' money in Irish third level education which involves an opportunity cost. Explain the underlined term a... show full transcript
Worked Solution & Example Answer:The Irish government invests significant amounts of taxpayers' money in Irish third level education which involves an opportunity cost - Leaving Cert Economics - Question 6 - 2017
Step 1
Explain the underlined term: opportunity cost
Answer
Opportunity cost refers to the cost of foregone alternatives when a choice is made. In the context of government investment in third level education, it represents the benefits that could have been gained from using that money in another way, such as investing in healthcare or infrastructure. Essentially, it highlights the notion that every investment decision carries a trade-off.
Step 2
Advantage 1: A better educated workforce
Answer
Investing in third level education can lead to a more skilled and knowledgeable workforce. Graduates are likely to earn higher incomes, which can improve the overall standard of living in the economy. A better educated workforce can also attract foreign direct investment (FDI), as companies typically prefer to base their operations in regions where they can find qualified employees.
Step 3
Advantage 2: Increased productivity
Answer
The investment in higher education often increases the productivity of workers. More educated employees tend to be more efficient and effective in their roles, leading to increased profitability for businesses. Higher productivity can also stimulate economic growth as companies expand and hire more workers due to increased demand for their products or services.