Suppose that in an hour Joe can prepare 10 sandwiches or 5 pizzas. The opportunity cost of Joe producing one sandwich is
A) 2 pizzas.
B) 1/2 pizza.
C) 5 pizzas.
D) 1 pizza.

Question

Quizplus · Accepted Answer

The opportunity cost of producing one sandwich for Joe is the amount of pizza he has to give up to make one sandwich. Since Joe can make 5 pizzas in the time it takes him to make 10 sandwiches, the opportunity cost of one sandwich is 1/2 pizza (5 pizzas / 10 sandwiches = 1/2 pizza per sandwich).

Suppose That in an Hour Joe Can Prepare 10 Sandwiches