A regional health authority operating with a fixed capital budget of £40 million must allocate its resources between two medical treatments: elective hip replacements at a cost of £8,000 per procedure, or oncology treatments at a cost of £40,000 per course of treatment.
If the authority decides to allocate £10 million of its budget to oncology treatments and spends the remaining £30 million on hip replacements, what is the opportunity cost of this decision?
250250250 oncology treatments
3,7503,7503,750 hip replacements
1,2501,2501,250 hip replacements
5,0005,0005,000 hip replacements
17 exam-style questions on Edexcel A A Level Economics 1.1.3 The economic problem. Each one has a worked solution and a mark scheme showing where the marks go.