Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen. Data for their sales last month are shown in this table: $$\begin{array} { | l | c | c | }
\hline & \text { Cars Sold } & \text { Trucks Sold } \
\hline \text { Larry } & 10 & 5 \
\hline \text { Joe } & 9 & 9 \
\hline \text { Ralph } & 3 & 12 \
\hline
\end{array}$$ Based on last month's data, Larry's opportunity cost of selling a truck is selling:

Question

Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen. Data for their sales last month are shown in this table: $$\begin{array} { | l | c | c | } 
\hline & \text { Cars Sold } & \text { Trucks Sold } \
\hline \text { Larry } & 10 & 5 \
\hline \text { Joe } & 9 & 9 \
\hline \text { Ralph } & 3 & 12 \
\hline
\end{array}$$ Based on last month's data, Larry's opportunity cost of selling a truck is selling:

Quizplus · Accepted Answer

Opportunity cost is the value of the next best alternative that must be given up in order to pursue a certain action. In this case, Larry's opportunity cost of selling a truck is selling cars instead. To calculate it, we divide the number of cars Larry sells by the number of trucks he sells in order to see how many cars he has to give up for each truck sold:
$$\frac{	ext{Cars sold}}{	ext{Trucks sold}} = \frac{10}{5} = 2$$
This means that Larry has to give up selling 2 cars for each truck he sells. Therefore, his opportunity cost of selling a truck is 2 cars.

So, the best choice is D, which means that Larry has to sell 2 cars in order to make up for the profit he would have made by selling one truck.

Dent 'N' Scratch Used Cars and Trucks Employs 3 Salesmen