Figure 3-5
These graphs illustrate the production possibilities available for dancing shoes to Fred and Ginger with 40 hours of labour.
-Refer to Figure 3-5. What is the opportunity cost of one pair of tap shoes for Ginger?
A) 1/4 pair of ballet slippers
B) 1/3 pair of ballet slippers
C) 3/4 pair of ballet slippers
D) 4/3 pairs of ballet slippers

Question

Figure 3-5
These graphs illustrate the production possibilities available for dancing shoes to Fred and Ginger with 40 hours of labour. 
-Refer to Figure 3-5. What is the opportunity cost of one pair of tap shoes for Ginger?
A) 1/4 pair of ballet slippers 
B) 1/3 pair of ballet slippers 
C) 3/4 pair of ballet slippers 
D) 4/3 pairs of ballet slippers

Quizplus · Accepted Answer

The opportunity cost of one good is what you give up of another good to get more of the first one. It's calculated from the slope of the production possibility frontier. If Ginger can produce tap shoes and ballet slippers, and the question asks for the opportunity cost of tap shoes in terms of ballet slippers, you look at how many ballet slippers are given up for each pair of tap shoes. Without the figure, the correct calculation follows the principle that if the opportunity cost of one pair of tap shoes is expressed in terms of ballet slippers, and given the options, 4/3 pairs of ballet slippers as the opportunity cost means for each pair of tap shoes produced, Ginger gives up the opportunity to produce 4/3 pairs of ballet slippers.

Figure 3-5 These Graphs Illustrate the Production Possibilities Available for Dancing Shoes