Read the scenario. The Carvel City Council held a vote to decide how to spend part of the city budget on a new social program. They had three programs to choose from: providing dental clinics for low-income residents, building additional affordable housing, or supplying nutritional support to older people. Which statement describes an opportunity cost if the council members vote to provide dental clinics for low-income residents?
Answer
A
Carvel’s homeless population will increase as a result of insufficient affordable housing.
B
Carvel’s low-income residents will experience a decline in their overall health.
C
Carvel’s low-income residents will have more access to affordable housing.
D
Carvel’s low-income residents will experience an overall improvement to their health.
Explanation
An opportunity cost is the benefit of the next-best option that the council gives up. By choosing dental clinics, the council cannot use that part of the budget to build affordable housing. As a result, the city may miss a chance to reduce homelessness, which is described in choice A.
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