A gardener has the ability to grow either apples or pears or some combination of the two. Given no other information, it follows that the gardener's opportunity cost of a pound of apples multiplied by his opportunity cost of a pound of pears
A)is equal to 0.
B)is between 0 and 1.
C)is equal to 1.
D)is greater than 1.

Question

Quizplus · Accepted Answer

The opportunity cost of one good in terms of another is the amount of the other good that must be given up to produce one more unit of the first good. If the gardener grows apples, he sacrifices the opportunity to grow pears, and vice versa. The opportunity cost of a pound of apples is the amount of pears forgone, and the opportunity cost of a pound of pears is the amount of apples forgone. When these opportunity costs are multiplied, the result is 1, reflecting the reciprocal nature of opportunity cost in a two-good model.

A Gardener Has the Ability to Grow Either Apples or Pears