Economic Awareness - Sectors of Indian Economy
A government has a budget to build either 5 hospitals or 10 schools. If it chooses to build 3 hospitals, what is the opportunity cost in terms of schools?
A government has a budget to build either 5 hospitals or 10 schools. If it chooses to build 3 hospitals, what is the opportunity cost in terms of schools?
easy Q12 of 15
Step-by-Step Solution
Step 1: Understand the trade-off
The government must give up schools to build hospitals due to limited budget.Step 2: Calculate opportunity cost
Opportunity cost per hospital = 10 schools / 5 hospitals = 2 schools per hospital. For 3 hospitals, opportunity cost = 3 × 2 = 6 schools.Final Answer:
6 schools → Option DQuick Check:
Opportunity cost = value of next best alternative foregone ✅
Quick Trick: Calculate per unit cost then multiply by chosen units.
Common Mistakes:
MISTAKES- Taking total schools as opportunity cost instead of proportional value.
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