Scott and Cindy both produce only pizza and tacos.In one hour, Scott can produce 20 pizzas or 40 tacos.In one hour, Cindy can produce 30 pizzas or 40 tacos.Cindy's opportunity cost of producing 1 taco is
A) 3/4 of a pizza.
B) 1 pizza.
C) 30 pizzas.
D) 40 pizzas.
E) 1 1/3 of a taco.

Question

Quizplus · Accepted Answer

Opportunity cost measures the opportunity forgone in order to produce one extra unit of another good. 
For Cindy, the opportunity cost of producing 1 taco is the number of pizzas that she could have produced instead. 
From the problem statement, we know that Cindy can produce either 30 pizzas or 40 tacos in one hour. 
Thus, the opportunity cost of producing 1 taco is 30/40 or 3/4 of a pizza.

Scott and Cindy Both Produce Only Pizza and Tacos