Graph 3-2 These figures illustrate the production possibilities available to Amy and Jim with 8 hours of labour.
-Refer to Graph 3-2.The opportunity cost of one doughnut for Jim is:
A)three coffees
B)two coffees
C)1/2 coffee
D)1/3 coffee

Question

Graph 3-2  These figures illustrate the production possibilities available to Amy and Jim with 8 hours of labour.
-Refer to Graph 3-2.The opportunity cost of one doughnut for Jim is:
A)three coffees 
B)two coffees 
C)1/2 coffee 
D)1/3 coffee

Quizplus · Accepted Answer

The opportunity cost of one item is what you give up to get that item. In this case, for Jim to produce one more doughnut, he gives up 1/3 of a coffee, as indicated by the slope of the production possibility frontier in Graph 3-2.

Graph 3-2 These Figures Illustrate the Production Possibilities Available