Use the following scenario to answer the next questions:
Karl and Jager produce cars and trucks. Karl can produce 10 cars per hour or 5 trucks per hour. Jager can produce 12 cars per hour or 4 trucks per hour.
-Based on the scenario, Karl's opportunity cost of one truck is ________ cars.

Question

Use the following scenario to answer the next  questions:
Karl and Jager produce cars and trucks. Karl can produce 10 cars per hour or 5 trucks per hour. Jager can produce 12 cars per hour or 4 trucks per hour.
-Based on the scenario, Karl's opportunity cost of one truck is ________ cars.

Quizplus · Accepted Answer

Karl can produce either 10 cars per hour or 5 trucks per hour. Thus, the opportunity cost of producing one truck is giving up production of two cars (10/5=2). Therefore, the best choice(s) will depend on the market demand for cars and trucks. If the demand for cars is high, Karl should produce cars and Jager should produce trucks, and vice versa if the demand for trucks is high.

Use the Following Scenario to Answer the Next Questions