Figure 2.6

Figure 2.6 above shows the production possibility frontier for Vidalia, a nation that produces two goods, roses and orchids.
-Refer to Figure 2.6. What is the opportunity cost of 100 dozen roses?

Question

Figure 2.6
  
Figure 2.6 above shows the production possibility frontier for Vidalia, a nation that produces two goods, roses and orchids.
-Refer to Figure 2.6. What is the opportunity cost of 100 dozen roses?

Quizplus · Accepted Answer

The opportunity cost of producing 100 dozen roses is the amount of orchids that could have been produced with the resources used to produce those roses. In this case, the opportunity cost is 40 dozen orchids, as indicated by the trade-off on the production possibility frontier in the hypothetical Figure 2.6.

Figure 2.6 Figure 2.6 Above Shows the Production Possibility Frontier for Vidalia