Economics 2281 · O Level · Opportunity cost

Opportunity cost — practice question

The governments of low-income countries often permit foreign multinational companies (MNCs) to extract minerals within their borders. Which trade-off between benefit and cost could this create for the low-income countries?

  • Abenefit: improved balance of trade; cost: training by the MNCs
  • Bbenefit: higher employment; cost: loss of a finite resource
  • Cbenefit: increased profits for the MNCs; cost: efficient production
  • Dbenefit: more sustainable development; cost: economic growth

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