Answer to Question #147417 in Microeconomics for Usman

Question

What are the factors you consider to figure out the opportunity cost of a vacation to Gorakh
Hill Station? (1 Marks) (Word count: 100 words max.)
b) Efficiency and equality are examples of classic trade-offs in economics. Analyze each of the
following statementsfrom the standpointsof efficiency and equality.
i. “Amid COVID-19, everyone in society should be guaranteed the best healthcare
possible.” (2 Marks) (Word count: 150 words max.)
ii. “When workers lose their jobs, they should be able to collect Ehsas income support
benefits until they find a new job.”

Answer 1

a) The factor to consider the opportunity cost of going on a vacation to Gorakh Hill station can be the expense to be borne for the vacation which otherwise could have been saved and used for an important purpose (new car, education, etc.), the important task needed to be done which otherwise will be postponed for the vacation.

b) (i) Providing everyone with the best possible healthcare facilities for COVID will be of great help to all and will serve the purpose of equality however that would come at the cost of huge expense for the government and debt to be taken by the government. Also at that time, while providing service to all, efficiency or benefit maximization from the scarce resources (funds of the support) will start to fall.

(ii) Providing income support to people who are in need due to loss of a job, will bring more equality by distributing income properly to the one who is in need, however, the efficiency to it reduces as there can be cases of barrier in the proper flow of income, thereby reducing the efficiency. Efficiency comes with benefit maximization to all which at times goes down because resources (funds) are limited.