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

Question

Quizplus · Accepted Answer

The opportunity cost of producing one sandwich is the amount of pizza Joe could have made instead. Since Joe can make 5 pizzas in an hour, the opportunity cost of one sandwich is 1/2 pizza (5 pizzas/10 sandwiches).

Suppose That in an Hour Joe Can Prepare 10 Sandwiches