Faruq spends all of his income on tacos and milkshakes.His income is $100,the price of tacos is $10,and the price of milkshakes is $2.If Faruq spends all of his income,the opportunity cost of one milkshake is equal to _____ tacos.
A)2
B)10
C)5
D)1/5

Question

Quizplus · Accepted Answer

Since Faruq spends all of his income, he can either buy 10 tacos and no milkshakes or 50 milkshakes and no tacos. Therefore, the opportunity cost of one milkshake is equal to the number of tacos that Faruq has to give up for one milkshake, which is 10/50 or 1/5. So the answer is D.

Faruq Spends All of His Income on Tacos and Milkshakes