If Farmer Sam MacDonald can produce 200 pounds of cabbages and 0 pounds of potatoes or 0 pounds of cabbages and 100 pounds of potatoes and faces a linear production possibilities curve for his farm, the opportunity cost of producing an additional pound of potatoes is _____ _ pound(s) of cabbage.
A) 1/2
B) 2
C) 100
D) 200

Question

Quizplus · Accepted Answer

The opportunity cost of producing an additional pound of potatoes is 2 pounds of cabbage. This is calculated from the given production possibilities: moving from 200 pounds of cabbages (and 0 pounds of potatoes) to 0 pounds of cabbages (and 100 pounds of potatoes) means that for every pound of potatoes produced, 2 pounds of cabbages are forgone (200 pounds of cabbages / 100 pounds of potatoes = 2 pounds of cabbages per pound of potatoes).

If Farmer Sam MacDonald Can Produce 200 Pounds of Cabbages