At various times, the United States has undergone the painful process of reducing military spending. Military bases from the Carolinas to California pleaded to be spared, citing huge job losses if they close. How can one rationally decide which bases to shut down, given the necessity of jobs?
What will be an ideal response?
One must examine the opportunity cost of continuing to operate each base. As an example, the money used to operate the San Diego Naval Station might have a next best alternative use in improving California’s state universities, which would add to productivity and so enhance growth. While closing the base would sacrifice military jobs, the opportunity cost would depend on the next best alternative employment for these workers. In the future, new jobs would be created for those trained. One would carry out the same exercise for each military installation and cut those with the highest opportunity cost. An example might be a New England base using antiquated defense equipment that provides little defense per dollar spent.
You might also like to view...
________ describes hardy people who bounce back, have a sense of control over their lives and do not fear change
a. Cognition b. Emotive ability c. Psychological hardiness d. Reactivity
One World View article is titled "Glaring Inequalities." Of the countries listed, the greatest inequality in the distribution of income is likely to occur in
A. Canada. B. Namibia. C. Sweden. D. The United States.
Peter studies at the coffee shop around the corner, at the same time that John talks loudly on his cell phone. The costs and benefits of each cell phone call made by John are given by the following table: 
If the both Peter and John could negotiate a settlement without transactions costs, how many phone calls would John end up making if he (John) had the rights to make any calls he liked at the coffee shop?
A. 0 B. 1 C. 2 D. 3
Suppose at the current price, the demand for copper is estimated at -3.14. What happens to sales revenue if the government imposes a price ceiling slightly below the free market equilibrium price in the copper market?
A) Sales revenue falls. B) Sales revenue rises. C) Sales revenue remains unchanged because copper is a necessity for most industries. D) It cannot be determined without information on prices.