Economy, asked by saitejaabc8021, 1 year ago

Importance of opportunity cost to the Government

Answers

Answered by arunsir389
4

Answer:

1. The opportunity cost of the resources used to produce goods supplied

through the public sector. If these resources were not used by the

government, then they could be used by people and firms in the private

sector.

2. The second opportunity cost is the cost of resources used to collect taxes

and to enforce government rules.

3. The third opportunity cost of government is the deadweight loss of

taxation. People’s incentives tend to change with a change in taxation.

(Don’t worry about this point for the first test as Dr. Fabricant has not

covered the taxation section of chapter 4.)

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