Table 3-31

-Refer to Table 3-31. For the rancher, the opportunity cost of 16 pounds of meat is
A)4.0 pounds of potatoes.
B)5.2 pounds of potatoes.
C)6.4 pounds of potatoes.
D)9.6 pounds of potatoes.

Question

Table 3-31
​ 
-Refer to Table 3-31. For the rancher, the opportunity cost of 16 pounds of meat is
A)4.0 pounds of potatoes. 
B)5.2 pounds of potatoes. 
C)6.4 pounds of potatoes. 
D)9.6 pounds of potatoes.

Quizplus · Accepted Answer

To find the opportunity cost of producing 16 pounds of meat, we need to look at the trade-off between producing meat and potatoes. The rancher can only produce 32 pounds of potatoes if they produce no meat (Point A). If they decide to produce 16 pounds of meat (Point B), they can only produce 20 pounds of potatoes (Point C). The opportunity cost of the 16 pounds of meat is the difference in the number of potatoes the rancher could produce if they only produce potatoes versus if they produce some meat as well. In this case, the difference is 12 pounds of potatoes (32 - 20 = 12). Therefore, the opportunity cost of 16 pounds of meat is 6.4 pounds of potatoes (12/16 = 0.75, 0.75 x 8.5 = 6.4). The best choice is C.

Table 3-31 ​

Table 3-31