Multiple Choice
When you spend \$25 on a new insulated water bottle, what is the opportunity cost of this decision?
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0. Basic Principles of Economics
Scarcity and Choice
Multiple Choice
According to Dwight Eisenhower, what did he identify as the opportunity cost of the nuclear buildup in the context of scarcity?
A
Expansion of international trade agreements
B
Higher government tax revenues
C
Increased military strength and global security
D
Resources that could have been used for schools, hospitals, and public welfare
Verified step by step guidance1
Understand the concept of opportunity cost: In microeconomics, opportunity cost refers to the value of the next best alternative foregone when a choice is made under conditions of scarcity.
Identify the context: Dwight Eisenhower discussed the opportunity cost of the nuclear buildup, which involves allocating scarce resources to military purposes.
Analyze the alternatives: The resources used for nuclear buildup could have been alternatively used for public goods such as schools, hospitals, and public welfare.
Recognize that increased military strength and global security, while benefits, are not the opportunity cost but rather the chosen use of resources.
Conclude that the opportunity cost is the value of what is given up—in this case, the resources that could have been invested in social programs like education and healthcare.
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