The Downward-Sloping Line in the Diagram Below Shows the Combinations

question 118

Multiple Choice

The downward-sloping line in the diagram below shows the combinations of health care and education expenditures that the government can afford with a given amount of tax revenue. FIGURE 1-6 Refer to Figure 1-6.Suppose the government's current spending is shown by point D.In this case,

• A)the government is not spending its total available budget for these two items.
• B)more education expenditures can be achieved only by sacrificing some existing health expenditures.
• C)more health expenditures can be achieved only by sacrificing some existing education expenditures.
• D)the government is spending more than its total budget.
• E)the prices of education and health care have increased beyond the government's ability to pay.