In one hour,George can fix 4 flat tires or type 200 words.His opportunity cost of fixing a flat tire is

Question

Quizplus · Accepted Answer

The opportunity cost is the value of the next best alternative that is given up in order to pursue the current choice. In this case, if George chooses to fix a flat tire, he gives up typing 200 words. Therefore, the opportunity cost of fixing a flat tire is 200 words divided by 4 flat tires, which is 50 words per flat tire. So, the best choice(s) for George is to type unless the cost of not fixing the flat tire is greater than 50 words. Therefore, the answer is D.

In One Hour,George Can Fix 4 Flat Tires or Type