Table 3-10
Juanita and Shantala run a business that programs and tests cellular phones. Assume that Juanita and Shantala can switch between programming and testing cellular phones at a constant rate. The following table applies.

-Refer to Table 3-10.Juanita's opportunity cost of testing one cellular phone is programming
A) 0.133 cellular phones and Shantala's opportunity cost of testing one cellular phone is programming 2.5 cellular phones.
B) 0.133 cellular phones and Shantala's opportunity cost of testing one cellular phone is programming 0.4 cellular phones.
C) 7.5 cellular phones and Shantala's opportunity cost of testing one cellular phone is programming 2.5 cellular phones.
D) 7.5 cellular phones and Shantala's opportunity cost of testing one cellular phone is programming 0.4 cellular phones.

Question

Table 3-10
Juanita and Shantala run a business that programs and tests cellular phones. Assume that Juanita and Shantala can switch between programming and testing cellular phones at a constant rate. The following table applies.
 
-Refer to Table 3-10.Juanita's opportunity cost of testing one cellular phone is programming
A) 0.133 cellular phones and Shantala's opportunity cost of testing one cellular phone is programming 2.5 cellular phones. 
B) 0.133 cellular phones and Shantala's opportunity cost of testing one cellular phone is programming 0.4 cellular phones. 
C) 7.5 cellular phones and Shantala's opportunity cost of testing one cellular phone is programming 2.5 cellular phones. 
D) 7.5 cellular phones and Shantala's opportunity cost of testing one cellular phone is programming 0.4 cellular phones.

Quizplus · Accepted Answer

Juanita's opportunity cost of testing one cellular phone is programming, which is the number of cellular phones she could have programmed in the time it takes to test one phone. This is calculated by dividing the programming rate by the testing rate, so her opportunity cost is 2 ÷ 15 = 0.133. Similarly, Shantala's opportunity cost of testing one cellular phone is programming is calculated as 1 ÷ 2.5 = 0.4. Therefore, the best choice is B.

Table 3-10 Juanita and Shantala Run a Business That Programs and Tests