-Agnes can produce either 1 unit of X or 1 unit of Y in an hour, while Brenda can produce either 2 units of X or 4 units of Y in an hour. The opportunity cost of producing a unit of Y is
A) 1 unit of X per unit of Y for Agnes and 2 units of X per unit of Y for Brenda.
B) 1 unit of X per unit of Y for Agnes and 1/2 unit of X per unit of Y for Brenda.
C) 1 hour for Agnes and 1/2 hour for Brenda.
D) 1 hour for Agnes and 2 hours for Brenda.

Question

-Agnes can produce either 1 unit of X or 1 unit of Y in an hour, while Brenda can produce either 2 units of X or 4 units of Y in an hour. The opportunity cost of producing a unit of Y is
A) 1 unit of X per unit of Y for Agnes and 2 units of X per unit of Y for Brenda. 
B) 1 unit of X per unit of Y for Agnes and 1/2 unit of X per unit of Y for Brenda. 
C) 1 hour for Agnes and 1/2 hour for Brenda. 
D) 1 hour for Agnes and 2 hours for Brenda.

Quizplus · Accepted Answer

The opportunity cost of producing a unit of Y for Agnes is 1 unit of X because she can produce either 1 unit of X or 1 unit of Y in an hour. For Brenda, the opportunity cost of producing a unit of Y is 1/2 unit of X because she can produce 2 units of X or 4 units of Y in an hour, meaning for every unit of Y produced, she sacrifices 1/2 unit of X.

-Agnes Can Produce Either 1 Unit of X or 1