Figure 18.2
-Refer to Figure 18.2.The opportunity cost of producing cheese in Pizzaland is

Question

Quizplus · Accepted Answer

The opportunity cost of producing cheese in Pizzaland is calculated by the ratio of the amount of tomatoes that could be produced instead of cheese. If the figure shows that Pizzaland can produce 1 cheese or 2.5 tomatoes, then the opportunity cost of 1 cheese is 2.5 tomatoes, which means the opportunity cost of 1 tomato is 1/2.5 = 0.4 cheese. Therefore, the opportunity cost of producing cheese is 0.4 tomatoes.

Figure 18.2 -Refer to Figure 18.2.The Opportunity Cost of Producing Cheese in Cheese