A council uses part of its budget to provide free adult literacy classes. It estimates the annual benefit from four alternative uses of the same budget as follows:
| Alternative use | Estimated annual benefit |
|---|---|
| Community legal advice | £8 million |
| Housing adaptations for disabled residents | £14 million |
| Youth employment support | £11 million |
| Local archive digitisation | £6 million |
What is the opportunity cost of the council's decision?
The £11 million benefit from youth employment support
The £6 million benefit from local archive digitisation
The £39 million total benefit from all four alternative uses
The £14 million benefit from housing adaptations for disabled residents
127 exam-style questions on OCR GCSE Economics 3.8 Limitations of markets, covering 3.8.1 Positive and negative externalities, 3.8.2 Policies to correct externalities, 3.8.3 Impact of externality policies, and 3.8.4 Costs and benefits of externality policies. Each one has a worked solution and a mark scheme showing where the marks go.