Betty and Ann live on a desert island. With a day's labor, Ann can produce 6 fish or 4 coconuts; Betty can produce 3 fish or 1 coconut. Betty's opportunity cost of producing 1 fish is _, and she should specialize in the production of .
A) 1 coconut; fish
B) 2/3 coconut; coconuts
C) 4 coconuts; fish
D) 1/3 coconut; fish

Question

Quizplus · Accepted Answer

Betty's opportunity cost of producing 1 fish is 1/3 coconut. She should specialize in the production of fish because her opportunity cost of producing fish is lower than Ann's.

Betty and Ann Live on a Desert Island