Mario divides his time between fishing and farming. In one day he can catch 20 kilograms of fish or harvest 10 bushels of potatoes. Mario's opportunity cost of farming is

Question

Quizplus · Accepted Answer

The opportunity cost of an action is what you have to give up to undertake that action. In this case, for every 10 bushels of potatoes Mario chooses to harvest (instead of fishing), he gives up catching 20 kilograms of fish. Therefore, the opportunity cost of 1 bushel of potatoes is 20 kilograms of fish divided by 10 bushels, which equals 2 kilograms of fish per bushel of potatoes.

Mario Divides His Time Between Fishing and Farming