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Fact 2.3.2
Agnes can produce either 1 unit of X or 1 unit of Y in an hour, while Brenda can produce either 2 units of X or 4 units of Y in a hour.
-Given Fact 2.3.2, the opportunity cost of producing a unit of Y is
A)1 unit of X for Agnes and 1/2 unit of X for Brenda.
B)1 unit of Y for Agnes and 2 units of Y for Brenda.
C)1 hour for Agnes and 2 hours for Brenda.
D)1 unit of Y for Agnes and 1/2 unit of Y for Brenda.
E)1 hour for Agnes and 1/2 hour for Brenda.

Question

Quizplus · Accepted Answer

The opportunity cost of producing a unit of Y for Agnes is 1 unit of X because she could have produced 1 unit of X in the same time. For Brenda, the opportunity cost of producing a unit of Y is 1/2 unit of X because she could have produced 2 units of X in the time it takes her to produce 4 units of Y, so for each unit of Y, she sacrifices 1/2 unit of X.

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