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 dozen eggs?
A)1 2/3 gallons of milk
B)3/5 of a gallon of milk
C)$2.50
D)$1.50

Question

Quizplus · Accepted Answer

The opportunity cost of buying a dozen eggs is what you give up to buy the eggs instead. Since a dozen eggs costs $1.50 and a gallon of milk costs $2.50, you give up the opportunity to buy $1.50/$2.50 = 3/5 of a gallon of milk.

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