The following figure shows the production possibilities curve for Sheena, who has to split her time between producing Web sites and computer programs.

-Refer to the figure above.What is the opportunity cost of producing 1 computer program?

Question

The following figure shows the production possibilities curve for Sheena, who has to split her time between producing Web sites and computer programs.
 
-Refer to the figure above.What is the opportunity cost of producing 1 computer program?

Quizplus · Accepted Answer

The opportunity cost of producing 1 computer program is the amount of Web sites that must be given up. From the curve, we can see that for every 1 computer program produced, Sheena must give up 0.2 Web sites. Therefore, the opportunity cost of 1 computer program is 0.2 Web sites.

Answer: B 
 The best choice depends on Sheena's preferences and the market demand for Web sites and computer programs. However, based on the production possibilities curve, the most Sheena can produce is at point C, which is 40 Web sites and 4 computer programs. Any point inside the curve is inefficient and any point outside the curve is currently unattainable with the given resources.

The Following Figure Shows the Production Possibilities Curve for Sheena