Answer to Question #289870 in Microeconomics for Shreya

Question

Mention two opportunity costs for building a dam on a river

Answer 1

In business, opportunity cost is the value of the next-best alternative when a business decision is made. In other words, it is the next best available alternative that is given up. Construction of a dam on a river will bring the following opportunity costs;

       i.           Disruption of a significant number of people along the river where the dam is built. The alternative solution would be not building the dam on a river because people depend on the river.

     ii.           The technology of building a dam on a river disrupts local ecosystems.

   iii.           Dams alter how the river functions. Sediments can be trapped, which bury rock riverbeds where fish sprawl.