Scenario: There are two workers in a factory that produces two goods, Good X and Good Y. Worker 1 adds a value of $200 per hour in the production of Good X and a value of $100 per hour in the production of Good Y. Worker 2 adds a value of $125 per hour in the production of Good X and a value of $87.50 per hour in the production of Good Y.
-Refer to the scenario above.The opportunity cost per dollar of the value added in the production of Good X by Worker 1 is ________ of the value added in the production of Good Y.

Question

Quizplus · Accepted Answer

The opportunity cost of Worker 1 producing Good X instead of Good Y is the value they could have added to Good Y if they weren't producing Good X. Since Worker 1 adds $200 to Good X and $100 to Good Y per hour, the opportunity cost per dollar of producing Good X is $100/$200 = $0.50 of the value added in producing Good Y.

Scenario: There Are Two Workers in a Factory That Produces