Question

Our resources are limited and should our local government use resources to build a new school, repair an old highway, or construct a new recreation center? What economic question does this scenario refer to?

Answer 1

The correct answer to this open question is the following.

Although there are no options attached we can say the following.

Our resources are limited and should our local government use resources to build a new school, repair an old highway, or construct a new recreation center?

The economic question that this scenario refers to is about the benefits and the impact of the probable investment. Due to the limited resources, the decision-makers have to ask what is the priority, what is the cost-benefit relation, the economic cost. and the opportunity cost.

The decision-makers have to consider who is going to be the beneficiary of the project, the group that is going to benefit the most with this type of investment. That is how the local government has to decide if it builds a new school, repairs an old highway, or constructs a new recreation center.