Explain, using a diagram, the opportunity cost to the UK government of allocating increased resources to the NHS.
Block Type
Knowledge Checkpoint
Bonus Knowledge checkpoint: Answer these actual Higher Economics exam questions
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Explain, using a diagram, the opportunity cost to the UK government of allocating increased resources to the NHS. (Worth 3 marks)
Diagram
Appropriately labelled PPC diagram (1)
Quantities indicated on axes using numbers/letters (1)
Explanation
opportunity cost is the sacrifice of the next best alternative so as spending on one item increases
less is available for the other (1) OR
as more resources are allocated to the NHS less can be allocated to other areas (1) OR
example from diagram, for example as NHS spending rises from A to B the opportunity cost is CD education spending sacrificed (1)
this may result in worsening education levels/lower productivity (1) as the government wants to maximise welfare but has limited tax revenue, choices must be made (1)
