In an eight-hour day,Andy can produce either 24 loaves of bread or 8 pounds of butter.In an eight-hour day,John can produce either 8 loaves of bread or 8 pounds of butter.The opportunity cost of producing 1 pound of butter is
A) 1/3 hour for Andy and 1 hour for John.
B) 1 hour for Andy and 1 hour for John.
C) 3 loaves of bread for Andy and 1 loaf of bread for John.
D) 1/3 loaves of bread for Andy and 1 loaf of bread for John.
E) none of the above

Question

Quizplus · Accepted Answer

To find the opportunity cost of producing 1 pound of butter, we need to compare how many loaves of bread each person would have to give up in order to produce 1 pound of butter.

For Andy:
Opportunity cost of 1 pound of butter = 24 loaves of bread / 8 pounds of butter = 3 loaves of bread

For John:
Opportunity cost of 1 pound of butter = 8 loaves of bread / 8 pounds of butter = 1 loaf of bread

Therefore, the opportunity cost of producing 1 pound of butter is 3 loaves of bread for Andy and 1 loaf of bread for John. So the best choice is C.

In an Eight-Hour Day,Andy Can Produce Either 24 Loaves of Bread