Answer to Question #299718 in Economics for hannah

Question

1.     The Canadian government is considering whether to spend 200 million dollars on new hospitals or new highways.  4 Marks Total

a.     Is the government faced with a trade-off? Explain. 2 Marks

Yes it’s a trade off because a trade off is a

Yes the government is faced with a trade off because

b.     If the government uses the funds to build highways, what did they give-up? What is the opportunity costs for the new highways? 2 Marks

Answer 1

a. Yes, the government is faced with a trade-off, because it should decide how to spend money and what to give-up.

b. If the government uses the funds to build highways, then they gave-up building hospitals. The opportunity costs for the new highways is the cost of building new hospitals.