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 coffee for Amy is:
A)three doughnuts
B)two doughnuts
C)1/2 doughnut
D)1/3 doughnut

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 coffee for Amy is:
A)three doughnuts 
B)two doughnuts 
C)1/2 doughnut 
D)1/3 doughnut

Quizplus · Accepted Answer

According to the graph, Amy can produce either 3 coffees and 6 doughnuts or 6 coffees and 0 doughnuts with 8 hours of labor. The opportunity cost of one coffee for Amy is the amount of doughnuts she must give up to produce one more coffee. In this case, if she produces 1 more coffee, she must give up 2 doughnuts (from 6 to 4). Therefore, the opportunity cost of one coffee for Amy is 2 doughnuts. 
The best choice(s) cannot be determined from the information given, as it depends on Amy and Jim's preferences.

Graph 3-2 These Figures Illustrate the Production Possibilities Available