Suppose that Sandy can produce 10 economic reports or make 2 sales calls.Suppose Tim can produce 2 economic reports or make 1 sales call.Which of the following is CORRECT?
A)The opportunity cost for Sandy of producing one economics report is 1/5 of a sales call.
B)The opportunity cost for Sandy of producing one sales call is 10 economics reports.
C)The opportunity cost for Tim of producing one sales call is 1/2 of an economics report.
D)The opportunity cost for Tim of producing one economics report is 2 sales calls.

Question

Quizplus · Accepted Answer

The opportunity cost is the value of the next best alternative foregone. Therefore, for Sandy, the opportunity cost of producing one economic report is giving up 1/5 of a sales call (since she can make 2 sales calls or produce 10 economic reports, the opportunity cost of one economic report is 2/10 or 1/5 of a sales call).

Suppose That Sandy Can Produce 10 Economic Reports or Make