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Economics · Oct / Nov 2017 · Paper 13 · Question 2

2281Opportunity cost

A government decides to spend more on defence and cannot spend money on a new airport. Which concepts can be applied to the above statement?

  1. Abudget surplus; external cost
  2. Bfactor of production; private monopoly
  3. Cpublic sector; opportunity cost
  4. Dtrade surplus; budget deficit

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Correct answer: C. public sector; opportunity cost

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