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

Question

Quizplus · Accepted Answer

The opportunity cost of moving from producing 75 guitars and 25 ukuleles to producing 25 guitars and 75 ukuleles is the amount of guitars that would no longer be produced in order to increase ukulele production. This is calculated as the difference in the number of guitars produced before and after the change, which is 75 guitars - 25 guitars = 50 guitars.

In the Above Figure, the Opportunity Cost of Moving from Producing