British Defence Spending: Making Choices
Teaching Business & Economics › Vol. 8 Nbr. 2, July 2004
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Summary
Defense is a superb example of opportunity cost in that it highlights two sets of choices--those between military and civilian expenditure; and those inherent in the allocation of a limited defense budget to different kinds of military expenditure. Asteris seeks to explain how the UK deals with these two sets of choices. While Britain is presently seeking to recast its military expenditure in the light of changing threats, there is an unwillingness to adequately fund defense aspirations.
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British Defence Spending: Making Choices
INTRODUCTION
The study of choice is a focal theme of Economics. Since resources are scarce, society must make complex choices between alternatives. Hence a decision to have more of one good or service means giving up an element of some other good or service. The cost of any decision is thus its opportunity cost - the value of the next alternative that is forgone. Defence is a superb example of opportunity cost in that it highlights two sets of choices: those between military and civilian expenditure (guns versus butter); and those inherent in the allocation of a limited defence budget to different kinds of military expendit...See the full content of this document
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