This graph describes the production possibilities on the island of Genovia:
The opportunity cost of producing one car in Genovia is:
A) 5,000 tons of agricultural products.
B) 500 tons of agricultural products.
C) 5 tons of agricultural products.
D) 50 tons of agricultural products.

Question

This graph describes the production possibilities on the island of Genovia: 
The opportunity cost of producing one car in Genovia is:
A) 5,000 tons of agricultural products. 
B) 500 tons of agricultural products. 
C) 5 tons of agricultural products. 
D) 50 tons of agricultural products.

Quizplus · Accepted Answer

The opportunity cost of any good equals what you must give up of the other good divided by what you gain.This country could give up 50,000 agricultural products to gain 1,000 cars.50,000/1,000 = 50.For linear production possibility curves,the axis intercepts can be used to calculate opportunity cost.

This Graph Describes the Production Possibilities on the Island of Genovia