Chapter 2.2, Problem 2R

To determine

To state: The question a citizen would ask considering opportunity cost.

Explanation of Solution

Trade-off: It is the concept used to regard the sacrifice of one good to attain another good. For example, an individual purchased a mobile so the individual exchanged the salary for a mobile. So, salary has been traded off for a mobile.

Opportunity cost: It is the cost of next best alternative available. For example, an individual purchases a tablet for online classes instead of purchasing speakers. The opportunity cost of purchasing tablet is speakers.

Here, the politician promised to invest funds in space program and education both. Knowing the concept of opportunity cost, a citizen would be concerned towards the opportunity cost of such funding by the politician.

The question would be ‘what investment would be given up by the politician to fund these programs?’.