Alison has a linear production possibility frontier in bracelets and necklaces.In one hour,she can produce 5 bracelets or 10 necklaces.What is the opportunity cost to make 1 necklace?
A)5 bracelets
B)10 necklaces
C)0.5 bracelet
D)2 necklaces

Question

Quizplus · Accepted Answer

The opportunity cost of making 1 necklace is the amount of the other good that must be given up to produce that necklace. Since Alison can produce 10 necklaces or 5 bracelets in one hour, the opportunity cost of 1 necklace is 1/2 (or 0.5) of a bracelet.

Alison Has a Linear Production Possibility Frontier in Bracelets and Necklaces.In