Question

__8. A local government has a limited

amount of money to spend. It decides to spend the
money to support local businesses instead of to
remove trash from unused buildings and vacant lots.
Which of these is the opportunity cost of this
decision?

Answer 1

Benefits enjoyed by not having trash in unused building and vacant plots

Step-by-step explanation:

Opportunity cost is the foregone benefit by deciding in favor of one item over the others. It is the value of the forfeited option. Opportunity cost is quantified as the cost of the next best alternative.

The local government has two options; to support local businesses or two remove trash from buildings. It has opted to support local businesses. Removing trash is the foregone benefit. The joy of having trash-free buildings and plots is the forfeited advantage. The value of a clean surrounding or the benefits derived by not having trash in the neighborhood is the opportunity cost.