Which of the following best explains the economic benefits of building a smaller courthouse instead of a larger one?

• A. A smaller courthouse ensures that all legal cases will be resolved more quickly.
• B. A smaller courthouse reduces construction and maintenance costs, allowing resources to be allocated to other public needs.
• C. A smaller courthouse guarantees higher tax revenues for the city.
• D. A smaller courthouse increases the prestige of the local government.

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the concept of opportunity cost, which is the value of the next best alternative foregone when making a decision. In this context, building a courthouse involves allocating resources that could be used elsewhere.
2. Step 2: Recognize that a smaller courthouse typically requires fewer resources to construct and maintain compared to a larger one. This means lower costs in terms of materials, labor, and ongoing expenses.
3. Step 3: Consider how the savings from reduced construction and maintenance costs can be redirected. These saved resources can be allocated to other public needs, such as education, healthcare, or infrastructure, which can provide broader economic benefits.
4. Step 4: Evaluate the other options given: faster case resolution, higher tax revenues, and increased prestige. Analyze whether these outcomes are guaranteed or directly linked to the size of the courthouse. For example, a smaller courthouse does not necessarily ensure faster case resolution or higher tax revenues.
5. Step 5: Conclude that the best economic benefit of building a smaller courthouse is the reduction in costs, which allows for more efficient allocation of limited public resources, maximizing overall economic welfare.