Using all its resources, an economy can produce either 200 computers or 800 chairs. If the economy produces 200 computers, its opportunity cost of producing these 200 computers is _____.

Question

Quizplus · Accepted Answer

The opportunity cost of producing 200 computers is the amount of the other good (chairs) that must be given up to produce them. Since the economy can produce either 200 computers or 800 chairs, the opportunity cost of producing 200 computers is 800 chairs.

Using All Its Resources, an Economy Can Produce Either 200