Table 3.3

-Consider two individuals, Nigel and Mia, who produce hair pins and bandanas. Nigel's and Mia's hourly productivity are shown in Table 3.3. Nigel's opportunity cost of producing one bandana is
A) 1/4 of a hair pin.
B) 2/5 of a hair pin.
C) 2.5 hair pins.
D) 4 hair pins.

Question

Table 3.3
 
-Consider two individuals, Nigel and Mia, who produce hair pins and bandanas. Nigel's and Mia's hourly productivity are shown in Table 3.3. Nigel's opportunity cost of producing one bandana is
A) 1/4 of a hair pin. 
B) 2/5 of a hair pin. 
C) 2.5 hair pins. 
D) 4 hair pins.

Quizplus · Accepted Answer

Nigel's opportunity cost of producing one bandana is the amount of hair pins he could have produced in the same amount of time it takes him to produce one bandana. He can produce 5 hair pins in one hour or 1 bandana in one hour. Therefore, his opportunity cost of producing one bandana is 5/1 = 5 hair pins. To find the fractional amount of a hair pin, we divide 1 by 5, which equals 1/5. Therefore, Nigel's opportunity cost of producing one bandana is 1/5 of a hair pin, which corresponds to choice B.

Table 3.3 -Consider Two Individuals, Nigel and Mia, Who Produce Hair Pins