The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between making pizzas and making stromboli. Refer to these figures to answer the questions that follow.

-What is Jim's opportunity cost of making a pizza?
A) 50 stromboli
B) 20 stromboli
C) 2.5 stromboli
D) 2 stromboli
E) 1.5 stromboli

Question

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between making pizzas and making stromboli. Refer to these figures to answer the questions that follow.
 
-What is Jim's opportunity cost of making a pizza?
A) 50 stromboli 
B) 20 stromboli 
C) 2.5 stromboli 
D) 2 stromboli 
E) 1.5 stromboli

Quizplus · Accepted Answer

Opportunity cost is the value of the next best alternative foregone. If Jim's opportunity cost of making a pizza is 2 stromboli, it means he gives up the production of 2 stromboli to make one pizza.

The Figures Below Depict the Production Possibilities Frontiers (PPFs) for Two