The Farm Factory,a booth at the local Farmer's Market,sells fresh eggs for $1.50 per dozen and fresh milk for $2.50 per gallon.What is the opportunity cost of buying a gallon of milk?
A)1 2/3 dozen eggs
B)3/5 of a dozen eggs
C)$2.50
D)$1.50

Question

Quizplus · Accepted Answer

The opportunity cost is the value of the next best alternative that must be forgone in order to purchase the gallon of milk. To calculate the opportunity cost of a gallon of milk at The Farm Factory, we need to compare the price of milk with the price of eggs. We can buy 1 gallon of milk for $2.50 or we can buy 1.67 dozens of eggs for $2.50 ($2.50 ÷ $1.50 per dozen = 1.67 dozen). Therefore, the opportunity cost of buying a gallon of milk is 1.67 dozens of eggs. The closest answer option is A, which is equivalent to 1 2/3 dozen eggs.

The Farm Factory,a Booth at the Local Farmer's Market,sells Fresh