2
QuizMultiple Choice

Opportunity Cost — Quiz

Question 2 • Personal Finance

When government officials have to decide about a public policy, what should be the first question they ask?

Answer
A
How much do I value this public policy?
B
What must the public give up in the future to have this policy?
C
How much does the public value this policy?
D
What does the public give up now to have this policy?

Explanation

A public policy uses resources that could be used for something else, so officials should first identify its opportunity cost: what the public gives up to have it. Choice D names that immediate trade-off; asking how much people value the policy matters too, but it does not identify what must be sacrificed.

AI-written and checked against the verified answer.

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