Table 3-12

-Refer to Table 3-12.For the farmer,the opportunity cost of 1 pound of meat is
A) 0.625 pound of potatoes.
B) 1.6 pounds of potatoes.
C) 5 pounds of potatoes.
D) 8 pounds of potatoes.

Question

Table 3-12
 
-Refer to Table 3-12.For the farmer,the opportunity cost of 1 pound of meat is
A) 0.625 pound of potatoes. 
B) 1.6 pounds of potatoes. 
C) 5 pounds of potatoes. 
D) 8 pounds of potatoes.

Quizplus · Accepted Answer

According to the table, the farmer can produce 20 pounds of meat or 32 pounds of potatoes with his resources. Therefore, the opportunity cost of 1 pound of meat is the amount of potatoes that the farmer has to give up in order to produce 1 pound of meat. The opportunity cost can be calculated as follows: 
Opportunity Cost of 1 pound of Meat = (Amount of Potatoes foregone) / (Amount of Meat produced)
Opportunity Cost of 1 pound of Meat = 32/20
Opportunity Cost of 1 pound of Meat = 1.6 pounds of Potatoes
So, the farmer needs to give up 1.6 pounds of potatoes in order to produce 1 pound of meat. Therefore, the answer is choice B.

Table 3-12 -Refer to Table 3-12.For the Farmer,the Opportunity Cost of 1