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 Y is
A) 1 unit of X for Agnes and 2 units of X for Brenda.
B) 1 hour for Agnes and 1/2 hour for Brenda.
C) 1 hour for Agnes and 2 hours for Brenda.
D) 1 unit of X for Agnes and 1/2 unit of X for Brenda.

Question

Quizplus · Accepted Answer

Agnes gives up 1 unit of X to produce 1 unit of Y, so her opportunity cost is 1 unit of X. Brenda gives up 2 units of X to produce 4 units of Y, so her opportunity cost per unit of Y is 1/2 unit of X.

Agnes Can Produce Either 1 Unit of X or 1