Consider the production possibilities frontier displayed in the figure shown.The opportunity cost of a bushel of apples is:
A) 3/20 watermelons.
B) 1/20 watermelons.
C) 1/40 watermelons.
D) 1/30 watermelons.

Question

Consider the production possibilities frontier displayed in the figure shown.The opportunity cost of a bushel of apples is:
A) 3/20 watermelons. 
B) 1/20 watermelons. 
C) 1/40 watermelons. 
D) 1/30 watermelons.

Quizplus · Accepted Answer

The opportunity cost of a bushel of apples is the amount of watermelon that must be given up to produce an additional bushel of apples. Looking at the graph, producing an additional bushel of apples requires giving up 1/20 of a watermelon (moving from point B to point C on the watermelon axis). This is the lowest opportunity cost among the given options.

Consider the Production Possibilities Frontier Displayed in the Figure Shown