Scenario: With her available resources, Wendy can produce 20 greeting cards or 10 earrings. Sarah, with the resources she has, can produce 5 greeting cards or 15 earrings.
-Refer to the scenario above.What is Sarah's opportunity cost of producing one greeting card?
A) 0.33 earrings
B) 0.5 earrings
C) 1 earring
D) 3 earrings

Question

Quizplus · Accepted Answer

Sarah's opportunity cost of producing one greeting card is the amount of earrings she has to give up to produce that card. Since she can produce 15 earrings or 5 greeting cards with her resources, for every greeting card produced, she gives up 15/5 = 3 earrings.

Scenario: with Her Available Resources, Wendy Can Produce 20 Greeting