Table 3-4
Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a constant rate.

-Refer to Table 3-4.The opportunity cost of 1 pound of potatoes for the farmer is
A) 1/5 pound of meat.
B) 2 hours of labor.
C) 5 pounds of meat.
D) 5 hours of labor.

Question

Table 3-4
Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a constant rate.
 
-Refer to Table 3-4.The opportunity cost of 1 pound of potatoes for the farmer is
A) 1/5 pound of meat. 
B) 2 hours of labor. 
C) 5 pounds of meat. 
D) 5 hours of labor.

Quizplus · Accepted Answer

The opportunity cost of 1 pound of potatoes for the farmer is the amount of meat he could have produced with the same resources used to produce 1 pound of potatoes. According to the table, the farmer can produce either 5 pounds of potatoes or 1 pound of meat with 1 hour of labor. Therefore, the opportunity cost of 1 pound of potatoes for the farmer is 1/5 pound of meat (since he could have produced 1/5 pound of meat with the same hour of labor used to produce 1 pound of potatoes).

Table 3-4 Assume That the Farmer and the Rancher Can Switch Between