University:
Texas A&M University
Course:
ECON 202 | Principles of Economics
Academic year:

2023
Views:

192

Pages:

3
Author:

rehinhea0c

2.1 The Principle of Opportunity Cost Apply the principle of opportunity cost. Economics is all about making choices; to make good choices, we must compare the benefit of something to its cost. Opportunity Cost: What you sacrifice to get something. “There is no such thing as a free lunch” The Cost of Military Spending The war in Iraq cost the United States an estimated $1 trillion. Each $100 billion could: • Enroll 13 million preschool children in the Head Start program for one year. • Hire 1.8 million additional teachers for one year. • Immunize all the children in less-developed countries for the next 33 years. The true cost of the war was its opportunity cost: what the United States sacrificed for it. Figure 2.1 Scarcity and the Production Possibilities Curve (1 of 3) Production possibilities curve: A curve that shows the possible combinations of products that an economy can produce, given that its productive resources are fully employed and efficiently used.