Keisha can produce the following combinations of X and Y: 100X and 20Y, 50X and 30Y, or 0X and 40Y. The opportunity cost of one unit of Y for Keisha is
A)5 units of X.
B)0.2 units of X.
C)3 units of X.
D)1\2 unit of X.

Question

Quizplus · Accepted Answer

The opportunity cost of one unit of Y is calculated by the loss of X when Y is increased. From 100X and 20Y to 50X and 30Y, Keisha gives up 50X to gain 10Y, so the opportunity cost is 50X/10Y = 5 units of X per unit of Y.

Keisha Can Produce the Following Combinations of X and Y