$$\begin{array} { | l | c | c | }
\hline & \begin{array} { c }
\text { U.S. production } \
\text { possibilities }
\end{array} & \begin{array} { l }
\text { France's production } \
\text { possibilities }
\end{array} \
\hline \text { Steel } & 100 & 25 \
\hline \text { Concrete } & 200 & 100 \
\hline
\end{array}$$
-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 per unit of Y for Agnes and 1/2 unit of X per unit of Y for Brenda.
B) 1 unit of X per unit of Y for Agnes and 2 units of X per unit of Y for Brenda.
C) 1 hour for Agnes and 1/2 hour for Brenda.
D) 1 hour for Agnes and 2 hours for Brenda.

Question

$$\begin{array} { | l | c | c | } 
\hline & \begin{array} { c } 
\text { U.S. production } \
\text { possibilities }
\end{array} & \begin{array} { l } 
\text { France's production } \
\text { possibilities }
\end{array} \
\hline \text { Steel } & 100 & 25 \
\hline \text { Concrete } & 200 & 100 \
\hline
\end{array}$$
-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 per unit of Y for Agnes and 1/2 unit of X per unit of Y for Brenda.
B) 1 unit of X per unit of Y for Agnes and 2 units of X per unit of Y for Brenda.
C) 1 hour for Agnes and 1/2 hour for Brenda.
D) 1 hour for Agnes and 2 hours for Brenda.

Quizplus · Accepted Answer

The opportunity cost of producing a unit of Y is the amount of X that must be given up to produce that unit of Y. For Agnes, the opportunity cost of producing a unit of Y is 1 unit of X, since she can produce either 1 unit of X or 1 unit of Y in an hour. For Brenda, the opportunity cost of producing a unit of Y is 1/2 unit of X, since she can produce either 2 units of X or 4 units of Y in an hour.

-Agnes Can Produce Either 1 Unit of X or 1