-At one point along a PPF, 50 tons of coffee and 100 tons of bananas are produced. At another point along the same PPF, 30 tons of coffee and 140 tons of bananas are produced. The opportunity cost of a ton of coffee between these points is
A) 1/2 of a ton of bananas.
B) 2 tons of bananas.
C) 7/5 of a ton of bananas.
D) 5/7 of a ton of bananas.

Question

-At one point along a PPF, 50 tons of coffee and 100 tons of bananas are produced. At another point along the same PPF, 30 tons of coffee and 140 tons of bananas are produced. The opportunity cost of a ton of coffee between these points is
A) 1/2 of a ton of bananas. 
B) 2 tons of bananas. 
C) 7/5 of a ton of bananas. 
D) 5/7 of a ton of bananas.

Quizplus · Accepted Answer

The opportunity cost of producing an additional ton of coffee is the loss of bananas. Moving from 50 to 30 tons of coffee, bananas increase from 100 to 140 tons. The opportunity cost is (140-100)/(50-30) = 40/20 = 2 tons of bananas per ton of coffee.

-At One Point Along a PPF, 50 Tons of Coffee