-The figure above shows Freda's PPF. Freda currently produces 10 packets of fudge and no cookies. If Freda decides to produce 1 packet of cookies, her opportunity cost of the packet of cookies is ________ of fudge.
A) 1 packet
B) 1/2 packet
C) 2 packets
D) 0 packets

Question

-The figure above shows Freda's PPF. Freda currently produces 10 packets of fudge and no cookies. If Freda decides to produce 1 packet of cookies, her opportunity cost of the packet of cookies is ________ of fudge.
A) 1 packet 
B) 1/2 packet 
C) 2 packets 
D) 0 packets

Quizplus · Accepted Answer

The opportunity cost of producing 1 packet of cookies is the amount of fudge Freda must give up to produce that packet of cookies. Based on the PPF curve, if Freda produces 1 packet of cookies, she has to reduce her fudge production by 2 packets, making the opportunity cost 2 packets of fudge.

-The Figure Above Shows Freda's PPF