Refer to the accompanying figure. For Pat, the opportunity cost of planting one bulb is removing:

A)20 bags of trash.
B)5 bags of trash.
C)1/20 of a bag of trash.
D)1/5 of a bag of trash.

Question

Refer to the accompanying figure. For Pat, the opportunity cost of planting one bulb is removing:  
    
 
A)20 bags of trash. 
B)5 bags of trash. 
C)1/20 of a bag of trash. 
D)1/5 of a bag of trash.

Quizplus · Accepted Answer

Pat gives up removing 20 bags of trash to plant 100 bulbs, so the opportunity cost of planting 1 bulb is removing 1/5 (= 20/100)of a bag of trash. More generally, the opportunity cost of producing an additional unit of the good on the vertical axis is the reciprocal of the absolute value of the slope of the PPC (that is, 1/|slope|).

Refer to the Accompanying Figure