Log out Go to App
Go to App

Learning Materials

Features

Discover

Chapter 2: Problem 11

Suppose the U.S. president is attempting to decide whether the federal government should spend more on research to find a cure for heart disease. Imagine that you are the president's economic advisor and need to prepare a report discussing the relevant factors the president should consider. Use the concepts of opportunity cost and trade-offs to discuss some of the main issues you would deal with in your report.

Short Answer

Expert verified
To decide on increasing spending on heart disease research, the president should consider the current allocation of federal funds, potential benefits of more research, and the opportunity cost and trade-offs of allocating more resources to this area. The final recommendation should be based on a thoughtful balancing act of these factors.

Step by step solution

01

Identify Current Situation

The current allocation of federal funds needs to be understood before proposing changes. This includes identifying what amount is currently spent on heart disease research specifically and the allocation of funds in other areas.
02

Consider Potential Benefits

Investigate and detail the potential benefits of dedicating more resources to heart disease research. This could include insights into the number of people affected, projected healthcare savings from effective treatment or preventative measures, and potential for job creation in the research sector.
03

Evaluate Opportunity Cost and Trade-offs

The opportunity cost represents what must be given up to allocate more resources to heart disease research. This could mean less funding for other research areas, health programs, or other sectors entirely. Detail these trade-offs and how they could affect other sectors, public health, or the economy more broadly.
04

Present Summary and Recommendations

Summarize the findings, assessing the benefits against the opportunity cost and trade-offs. Based on this evaluation, draft recommendations on whether or not to increase spending on heart disease research.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Start your free trial

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

What does increasing marginal opportunity costs mean? What are the implications of this idea for the shape of the production possibilities frontier?

Imagine that the next time the New England Patriots play the Miami Dolphins at Gillette Stadium in Foxborough, Massachusetts, Patriots star quarterback Tom Brady has a temporary lack of judgment and plans to sell Patriots memorabilia during the game because he realizes that he can sell five times more Patriots products than anyone in the stadium sports gear store. Likewise, imagine that you are a creative and effective manager at work and that you tell your employees that during the next six months, you plan to clean the offices because you can clean five times better than the cleaning staff. What error in judgment are both you and Tom making? Why shouldn't you and Tom do what you are better than anyone else at doing?

During the 1928 U.S. presidential election campaign, Herbert Hoover, the Republican candidate, argued that the United States should import only products that could not be produced here. Briefly explain whether this policy would be likely to raise average income in the United States.

What is absolute advantage? What is comparative advantage? Is it possible for a country to have a comparative advantage in producing a good without also having an absolute advantage? Briefly explain.

According to an article in the Wall Street Journal, Staples Inc., an office supply store, "has found a new use for some of its roomy office-supply stores: make parts of them into offices." Because many businesses now store their records digitally and many consumers shop online rather than in stores, Staples no longer needs as much floor space for filing cabinets and some other products. To use the surplus space, Staples has undertaken a partnership with Workbar, an office-sharing firm, to offer small business owners and professionals shared workspaces inside select Staples retail stores. In these circumstances, does Staples incur a cost from using some of the space in its retail stores for office workspaces? If Staples does incur a cost, briefly explain what the cost would be.
See all solutions

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free