Question

""The money and resources currently being devoted to the War on Terrorism reduces the quantity of other goods that we are able to supply." This statement most clearly illustrates which of the following?"

Answer 1

Answer:

The Concept of Opportunity Cost

Explanation:

An opportunity cost is the cost associated with choosing to enjoy  a particular benefit or pursue a particular venture at the expense of enjoying the benefit of its best alternate choice. In other words, when you enjoy the benefits of action A, the opportunity cost is the potential benefit of action B that one had to give up to achieve action A.

According to the question, money and resources devoted to war on terrorism represents the choice of the nation and the benefits maybe that the country is free from terrorist attacks. However, the opportunity cost is that the benefit of freedom from terrorist attacks comes at the expense of goods that could have been produced if the country should choose to pursue production of goods.