Scenario: Consider two economies, Beta and Zeta. Each farmer in Beta can grow 1,000 pounds of apples or 500 pounds of oranges in a year. Each farmer in Zeta can grow 400 pounds of apples or 1,200 pounds of oranges in a year.
-Refer to the scenario above.The opportunity cost of producing 1 pound of apples in Beta is ________.

Question

Quizplus · Accepted Answer

The opportunity cost of producing 1 pound of apples in Beta is the amount of oranges that could have been produced instead. Since a farmer in Beta can produce 1,000 pounds of apples or 500 pounds of oranges, producing 1 pound of apples means giving up 0.5 pounds of oranges (500 pounds of oranges / 1,000 pounds of apples = 0.5 pounds of oranges per pound of apples).

Scenario: Consider Two Economies, Beta and Zeta