With a Budget of $200 Million, the Government Can Choose $1 / 50$

question 19

Short Answer

With a budget of $200 million, the government can choose to purchase 4 helicopters or repair 200 km of highway. FIGURE 1- 1
-Refer to Figure 1- 1. For the government, the opportunity cost of one kilometre of highway repair is A) $1 / 50$ of a search and rescue helicopter.
B) $1 / 2$ of a search and rescue helicopter.
C) $1 / 10$ of a search and rescue helicopter.
D) $1 / 100$ of a search and rescue helicopter.
E) 1 search and rescue helicopter.

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Definitions:

APC

It stands for Average Propensity to Consume, indicating the fraction of income that is spent on consumption rather than savings.

APS

Average Propensity to Save, which is the fraction of income that is saved rather than spent on consumption, calculated as savings divided by disposable income.

APC

Average Propensity to Consume, the ratio of total consumption to total disposable income, indicating how much income is spent on goods and services.

APS

Average Propensity to Save, a macroeconomic term that refers to the proportion of total income which is saved by households in an economy.