Photo AI
Define the term 'opportunity cost' - Leaving Cert Economics - Question 1 - 2014
Question 1
Define the term 'opportunity cost'. State one example of an opportunity cost facing the Irish Government. Definition: Example:
Worked Solution & Example Answer:Define the term 'opportunity cost' - Leaving Cert Economics - Question 1 - 2014
Step 1
Define the term 'opportunity cost'.
Answer
Opportunity cost is defined as the cost of forgone alternatives involved in making a choice. It represents the value of the next best alternative that is not chosen when a decision is made. In economic terms, it highlights the potential benefits that an individual, investor, or government misses out on when selecting one option over another.
Step 2
State one example of an opportunity cost facing the Irish Government.
Answer
An example of an opportunity cost facing the Irish Government is the choice to invest in a new hospital. The opportunity cost of this decision is the other infrastructural projects that must be deferred due to limited financial resources. This could mean delaying improvements to public transportation or school facilities, which may also have significant impacts on the community.