Exhibit 3-13 Refer to Exhibit 3-13.The opportunity cost of producing an additional cake equals:

Question

Exhibit 3-13  Refer to Exhibit 3-13.The opportunity cost of producing an additional cake equals:

Quizplus · Accepted Answer

The opportunity cost of producing an additional cake is the quantity of cupcakes that must be given up. In this case, if one cake is produced, then 4 cupcakes must be given up (since the production possibility schedule shows that 1 cake can be produced with the same resources used to produce 4 cupcakes). Therefore, the opportunity cost of producing an additional cake is 4 cupcakes. Choice C is the best choice as it correctly identifies the opportunity cost as 4 cupcakes.