Use the following scenario to answer the next eight questions:
Karl and Pete produce cars and trucks. Karl can produce 10 cars per hour or 5 trucks per hour. Pete can produce 12 cars per hour or 4 trucks per hour.
-Based on the scenario,Pete's opportunity cost of one car is:

Question

Quizplus · Accepted Answer

Pete's opportunity cost of one car is equal to the number of trucks he could have produced in the same amount of time. Since he can produce 4 trucks per hour and 12 cars per hour, his opportunity cost of one car is 1/3 truck.

Therefore, the best choice would be to have Karl produce trucks (since his opportunity cost of one truck is only 1/2 car) and have Pete produce cars (since his opportunity cost of one car is lower than Karl's). So the best choice is to have Karl produce trucks and Pete produce cars.

Use the Following Scenario to Answer the Next Eight Questions