A small landscaping firm purchases a tractor that,in one day,is capable of drilling 60 fence- post holes or removing 12 tree stumps (or some intermediate combination).For this landscaper,what is the opportunity cost of removing one extra tree stump?

Question

Quizplus · Accepted Answer

The opportunity cost of removing one extra tree stump is the alternative that must be given up in order to do so. Since the tractor can remove 12 tree stumps or drill 60 fence-post holes in a day, the opportunity cost of removing one extra tree stump is equivalent to the amount of fence-post holes that the tractor could drill in the same amount of time. Therefore, the opportunity cost of removing one extra tree stump is 5 fence-post holes (60 fence-post holes ÷ 12 tree stumps = 5 fence-post holes per tree stump).

A Small Landscaping Firm Purchases a Tractor That,in One Day,is