Alison has a linear production possibility frontier in bracelets and necklaces.In 1 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 producing 1 necklace is the amount of bracelets that could have been produced instead. Since Alison can produce 5 bracelets in the same time she can produce 10 necklaces, the opportunity cost of 1 necklace is 0.5 bracelet (5 bracelets/10 necklaces).

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