The downward- sloping line in the diagram below shows the combinations of health care and education expenditures that the government can afford with a given amount of tax revenue. FIGURE 1- 5
-Refer to Figure 1- 5. Suppose the government's current spending is shown by point D. In this case,
A) more education expenditures can be achieved only by sacrificing some health expenditures.
B) the government should spend its total budget so as to get to point B, since more health spending and more education spending are both clearly desirable.
C) the prices of education and health care have increased beyond the government's ability to pay.
D) more health expenditures can be achieved only by sacrificing some education expenditures.
E) the government is not spending its total budget.

Question

The downward- sloping line in the diagram below shows the combinations of health care and education expenditures that the government can afford with a given amount of tax revenue.  FIGURE 1- 5
-Refer to Figure 1- 5. Suppose the government's current spending is shown by point D. In this case,
A) more education expenditures can be achieved only by sacrificing some health expenditures. 
B) the government should spend its total budget so as to get to point B, since more health spending and more education spending are both clearly desirable. 
C) the prices of education and health care have increased beyond the government's ability to pay. 
D) more health expenditures can be achieved only by sacrificing some education expenditures. 
E) the government is not spending its total budget.

Quizplus · Accepted Answer

The statement suggests that point D indicates the government is not utilizing its full budget, implying there is room to increase spending in either or both areas without sacrificing the other.

The Downward- Sloping Line in the Diagram Below Shows the Combinations