Opportunity cost lies at the heart of national healthcare planning, where a centralized health authority must distribute a finite annual budget across competing medical interventions. With the rapid development of expensive gene therapies and immunotherapy treatments, clinical directors face agonizing decisions.
In many regions, treating rare genetic disorders is extremely costly per patient, but offers life-saving outcomes for a small group. Conversely, allocating those same funds to preventative medicine, such as nationwide cardiovascular screenings or diabetes lifestyle clinics, can improve the life expectancy of thousands of citizens at a much lower cost-per-capita. If the health authority decides to fully fund the high-cost gene therapies, the opportunity cost is represented by the preventative programs that must be scaled back or cancelled.
Define the term 'opportunity cost' (Extract K, line 1).
123 exam-style questions on AQA A Level Economics 1.1 Economic methodology and the economic problem, covering 1.1.1 Economic methodology, 1.1.2 The nature and purpose of economic activity, 1.1.3 Economic resources, 1.1.4 Scarcity, choice and the allocation of resources, and 1.1.5 Production possibility diagrams. Each one has a worked solution and a mark scheme showing where the marks go.