A country that uses all its resources efficiently is presently producing 150 cars and 500 telephones. If it switches to producing 250 cars and 200 telephones, then the opportunity cost of the extra 100 cars produced is:
A) impossible to determine from the information given.
B) 300 telephones.
C) 200 telephones.
D) 500 telephones.

Question

Quizplus · Accepted Answer

The opportunity cost is the number of telephones forgone to produce the additional 100 cars, which is 500 - 200 = 300 telephones.

A Country That Uses All Its Resources Efficiently Is Presently