In the period of one week, Mohammed can knit 5 sweaters or bake 240 cookies.What is Mohammed's opportunity cost per cookie?

Question

Quizplus · Accepted Answer

Opportunity cost is the value of the next best alternative that must be given up in order to pursue a certain action. Here, Mohammed has two options: knitting sweaters or baking cookies. The opportunity cost of baking cookies is the number of sweaters that he could have knitted instead. 
In one week, Mohammed can knit 5 sweaters or bake 240 cookies. Therefore, the opportunity cost of baking 1 cookie is equal to 1/48 of a sweater (since 240/5 = 48). 
Thus, the correct answer is option C, which states that Mohammed's opportunity cost per cookie is 1/48 of a sweater. Option A is incorrect because it merely states the quantity of sweaters that Mohammed could knit. Option B is incorrect because it is an irrelevant number (48 sweaters) that does not measure the opportunity cost of baking cookies. Option D is incorrect because it confuses the opportunity cost of baking cookies with the quantity of cookies that can be baked in one week.

In the Period of One Week, Mohammed Can Knit 5