Use the information below to answer the following questions.
Fact 2.3.2
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 a hour.
-Given Fact 2.3.2, 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 1/4 hour for Brenda.
C)1 hour for Agnes and 1/2 hour for Brenda.
D)1 unit of Y for Agnes and 1/2 unit of Y for Brenda.
E)1 hour for Agnes and 2 hours for Brenda.

Question

Quizplus · Accepted Answer

The opportunity cost of producing a unit of X is the amount of Y that could have been produced in the same amount of time instead. Therefore, for Agnes, the opportunity cost is 1 unit of Y per hour of production (1X = 1Y). For Brenda, the opportunity cost is 2 units of Y per hour of production (2X = 4Y).

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