Suppose one unit of labour can produce either 5 wool sweaters or 2 pineapples.What is the opportunity cost of producing one wool sweater?
A)5 pineapples
B)2 pineapples
C)2/5 of a pineapple
D)5/2 pineapples
E)zero pineapples

Question

Quizplus · Accepted Answer

The opportunity cost of producing one wool sweater is the amount of the other good that must be given up to produce it. Since one unit of labor can produce either 5 wool sweaters or 2 pineapples, producing one wool sweater means giving up the production of 2/5 of a pineapple.

Suppose One Unit of Labour Can Produce Either 5 Wool