In the above figure, moving from producing 50 guitars and 50 ukuleles to producing 25 guitars and 75 ukuleles, the opportunity cost of one ukulele is
A) 25 guitars.
B) 75 ukuleles.
C) 25 ukuleles.
D) 1 guitar.

Question

Quizplus · Accepted Answer

The opportunity cost of one ukulele is the number of guitars given up to produce one more ukulele. Moving from 50 guitars to 25 guitars while increasing ukuleles from 50 to 75 means giving up 25 guitars for 25 additional ukuleles, so the opportunity cost is 1 guitar per ukulele.

In the Above Figure, Moving from Producing 50 Guitars and 50