$$\begin{array} { c c c }
& \text { One American Worker } & \text { One Italian Worker } \
\text { Beer } & 5 \mathrm { kegs } & 8 \mathrm { kegs } \
\text { Pizzas } & 10 & 12
\end{array}$$
-The opportunity cost of producing one keg of beer in Italy is
A)3/2 pizzas.
B)12 pizzas.
C)4 pizzas.
D)1/12 pizzas.
E)2/3 pizzas.

Question

$$\begin{array} { c c c } 
& \text { One American Worker } & \text { One Italian Worker } \
\text { Beer } & 5 \mathrm { kegs } & 8 \mathrm { kegs } \
\text { Pizzas } & 10 & 12
\end{array}$$
-The opportunity cost of producing one keg of beer in Italy is
A)3/2 pizzas.
B)12 pizzas.
C)4 pizzas.
D)1/12 pizzas.
E)2/3 pizzas.

Quizplus · Accepted Answer

The opportunity cost of producing one keg of beer in Italy is the amount of pizzas that could have been produced instead. Given that one Italian worker can produce 8 kegs of beer or 12 pizzas, the opportunity cost of 1 keg of beer is 12 pizzas / 8 kegs = 1.5 or 3/2 pizzas.

-The Opportunity Cost of Producing One Keg of Beer in American