Scenario: The following production possibilities schedules and curves represent the amount of corn and alfalfa that can be produced on an acre of land in Idaho and Iowa.

These production possibilities schedules are shown in the following figure.

-Refer to the scenario above.The opportunity cost of a ton of alfalfa in Idaho is ________.
A) of a bushel of corn
B) 1 bushel of corn
C) 15 bushels of corn
D) 120 bushels of corn

Question

Scenario: The following production possibilities schedules and curves represent the amount of corn and alfalfa that can be produced on an acre of land in Idaho and Iowa.
  
These production possibilities schedules are shown in the following figure.
 
-Refer to the scenario above.The opportunity cost of a ton of alfalfa in Idaho is ________.
A) of a bushel of corn 
B) 1 bushel of corn 
C) 15 bushels of corn 
D) 120 bushels of corn

Quizplus · Accepted Answer

The opportunity cost of a ton of alfalfa in Idaho is the amount of corn that must be given up to produce one additional ton of alfalfa. Looking at the production possibility schedules, Idaho can produce 120 bushels of corn or 8 tons of alfalfa on one acre of land. Therefore, to produce one additional ton of alfalfa, Idaho must give up the production of 120/8 = 15 bushels of corn. Therefore, the opportunity cost of a ton of alfalfa in Idaho is 15 bushels of corn.

Scenario: the Following Production Possibilities Schedules and Curves Represent the Amount