Agnes can produce either 1 unit of X or 1 unit of Y in an hour, while Brenda can produce either 2 units of X or 4 units of Y in an hour. The opportunity cost of producing a unit of X is
A) 1 unit of Y for Agnes and 2 units of Y for Brenda.
B) 1 hour for Agnes and 1/2 hour for Brenda.
C) 1 unit of Y for Agnes and 1/2 unit of Y for Brenda.
D) 1 hour for Agnes and 2 hours for Brenda.

Question

Quizplus · Accepted Answer

The opportunity cost of producing a unit of X for Agnes is 1 unit of Y, while for Brenda it is 2 units of Y. Therefore, the option that correctly represents the opportunity cost is A. It takes Agnes one hour to produce 1 unit of X, while for Brenda it takes 0.5 hour (since she can produce 2 units of X in an hour). However, the question specifically asks for the opportunity cost of producing a unit of X, not the time it takes to produce it. So, the correct answer is A.

Agnes Can Produce Either 1 Unit of X or 1