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
Definition:
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Answer
Opportunity cost is defined as the cost of forgone alternatives involved in making a choice. It represents the benefit that is missed or given up when selecting one option over another, essentially measuring the sacrifice associated with the next best alternative.
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Example:
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Answer
An example of an opportunity cost facing the Irish Government could be the decision to spend on a new hospital. The opportunity cost in this scenario would be the infrastructural projects that must be deferred, such as road improvements or public transport enhancements, which might have a comparable societal benefit.
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