O Levels Economics (2281)•2281/11/M/J/19

Explanation
Opportunity Cost of Resource Allocation Steps:
- Identify resources used by golf courses: land and water in water-scarce China.
- Determine alternative uses: land often converted from agriculture, water from irrigation.
- Evaluate forgone benefits: agricultural output lost due to conversion.
- Select option matching highest-value alternative: farmland loss represents key trade-off.
Why C is correct:
- Opportunity cost is the value of the next best alternative forgone; here, land for golf courses means lost agricultural production from farmland.
Why the others are wrong:
- A: Direct monetary cost of water, not the forgone alternative use.
- B: Unrelated to resource trade-offs; equipment sales are a potential benefit, not a cost.
- D: Direct expense for labor, not an alternative use of resources.
Final answer: C
Topic: Opportunity cost
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