Figure 2-7

Tesla opened its Gigafactory near Sparks, Nevada to produce lithium-ion batteries for both its automobiles and its Powerwall energy storage products. Figure 2-7 shows changes to its production possibilities frontier at the Gigafactory in response to new developments and different strategic production decisions.
-Sarita can bake either a combination of 25 cakes and 15 pies or a combination of 10 cakes and 20 pies.If she now bakes 10 cakes and 20 pies, what is the opportunity cost of baking an additional 15 cakes?
A)5 pies
B)10 pies
C)15 pies
D)20 pies

Question

Figure 2-7
  
Tesla opened its Gigafactory near Sparks, Nevada to produce lithium-ion batteries for both its automobiles and its Powerwall energy storage products. Figure 2-7 shows changes to its production possibilities frontier at the Gigafactory in response to new developments and different strategic production decisions.
-Sarita can bake either a combination of 25 cakes and 15 pies or a combination of 10 cakes and 20 pies.If she now bakes 10 cakes and 20 pies, what is the opportunity cost of baking an additional 15 cakes?
A)5 pies 
B)10 pies 
C)15 pies 
D)20 pies

Quizplus · Accepted Answer

The opportunity cost of baking an additional 15 cakes is 15 pies, because Sarita could have baked 15 pies instead of the 15 cakes.

Figure 2-7 Tesla Opened Its Gigafactory near Sparks, Nevada to Produce Lithium-Ion