Suppose that in an hour Joe can prepare 10 sandwiches or 5 pizzas. The opportunity cost of Joe producing one sandwich is
A) 2 pizzas.
B) 1 pizza.
C) 1/2 pizza.
D) 5 pizzas.

Question

Quizplus · Accepted Answer

The opportunity cost of producing one sandwich is the amount of pizza Joe could have produced instead. Since Joe can make 5 pizzas in an hour, he gives up 1/2 pizza for each sandwich he makes (5 pizzas/10 sandwiches = 1/2 pizza per sandwich).

Suppose That in an Hour Joe Can Prepare 10 Sandwiches