Suppose one worker in New Ralph Island can produce 40 walking sticks or 10 boomerangs each hour.The opportunity cost of producing 1 walking stick is _____.

Question

Quizplus · Accepted Answer

The opportunity cost of producing 1 walking stick is the amount of the other good that must be given up to produce it. Since 40 walking sticks can be exchanged for 10 boomerangs, producing 1 walking stick costs 10/40 = 0.25 boomerangs.

Suppose One Worker in New Ralph Island Can Produce 40