Table 2-4
Production Possibilities for Picnicland
-Refer to Table 2-4. What is the opportunity cost to Picnicland of increasing the production of hotdogs from 450 to 900?
A)150 burgers
B)225 burgers
C)300 burgers
D)450 burgers

Question

Table 2-4
Production Possibilities for Picnicland 
-Refer to Table 2-4. What is the opportunity cost to Picnicland of increasing the production of hotdogs from 450 to 900?
A)150 burgers 
B)225 burgers 
C)300 burgers 
D)450 burgers

Quizplus · Accepted Answer

The opportunity cost of increasing the production of hotdogs from 450 to 900 is the amount of burgers that Picnicland has to give up in order to produce more hotdogs. This is represented by the slope of the production possibilities curve, which is -1/2. Therefore, in order to produce an additional 450 hotdogs, Picnicland has to give up 225 burgers (450/2). The best choice is B, which represents the opportunity cost of increasing the production of hotdogs from 450 to 900.

Table 2-4 Production Possibilities for Picnicland