When the government chooses to use resources to build a dam, these sources are no longer available to build a highway. This choice illustrates the concept of
A) a market mechanism.
B) macroeconomics.
C) opportunity cost.
D) a fallacy of composition.

Question

Quizplus · Accepted Answer

The concept of opportunity cost refers to the cost of not being able to pursue the next best alternative when a choice is made; in this case, choosing to build a dam means the resources cannot be used to build a highway, representing the opportunity cost of the decision.

When the Government Chooses to Use Resources to Build a Dam