A medical clinic has 10 workers. Each worker can produce a maximum of either 2 units of medical services or 5 units of secretarial services a day. The opportunity cost of one more unit of medical services is
A)2 units of secretarial services.
B)5 units of secretarial services.
C)0.4 units of secretarial services.
D)2.5 units of secretarial services.
E)dependent on the level of services.

Question

Quizplus · Accepted Answer

The opportunity cost of producing one more unit of medical services is the amount of secretarial services that must be given up. Since each worker can produce 2 units of medical services or 5 units of secretarial services, the opportunity cost of 1 unit of medical services is 5/2 = 2.5 units of secretarial services.

A Medical Clinic Has 10 Workers