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Fact 2.4.1
In an eight-hour day, Andy can produce either 24 loaves of bread or 8 kilograms of butter. In an eight-hour day, Rolfe can produce either 8 loaves of bread or 8 kilograms of butter.
-Refer to Fact 2.4.1. The opportunity cost of producing 1 kilogram of butter is
A)20 minutes (1/3 hour)for Andy and 1 hour for Rolfe.
B)1 hour for Andy and 1 hour for Rolfe.
C)3 loaves of bread for Andy and 1/3 loaf of bread for Rolfe.
D)3 loaves of bread for Andy and 1 loaf of bread for Rolfe.
E)8 loaves of bread for Rolfe and 24 loaves of bread for Andy.

Question

Quizplus · Accepted Answer

The opportunity cost of producing 1 kilogram of butter for Andy is 3 loaves of bread (since he can produce 24 loaves in 8 hours, or 3 loaves per hour, and 8 kilograms of butter in 8 hours, or 1 kilogram per hour). For Rolfe, the opportunity cost is 1 loaf of bread (since he can produce 8 loaves in 8 hours, or 1 loaf per hour, and 8 kilograms of butter in 8 hours, or 1 kilogram per hour).

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