Jose and Maria work at a restaurant. Jose can make either 10 pancakes or 4 waffles; Maria can make either 8 pancakes or 2 waffles. According to this scenario, the opportunity cost of making one pancake for Jose is
A) 1/4 waffle.
B) 2/5 waffle.
C) 2.5 waffles.
D) 4 waffles.

Question

Quizplus · Accepted Answer

The opportunity cost for Jose of making one pancake is the number of waffles he could have made instead. Using the ratios given in the problem, we can calculate the opportunity cost:
Jose: 10 pancakes / 4 waffles = 2.5 pancakes per waffle
Maria: 8 pancakes / 2 waffles = 4 pancakes per waffle

Therefore, for Jose, the opportunity cost of making one pancake is 2.5/1 waffles, or 2/5 waffle.

The best choice would depend on the situation, such as the number of orders for pancakes versus waffles and the cost of ingredients. The restaurant may want to produce more of the item with the higher profit margin or the item that is more in demand.

Jose and Maria Work at a Restaurant