Question

Numerical fill-in-the-blank. Marv works at a bakery. During a shift at work, Marv can decorate either 8 wedding cakes or 13 cheesecakes. The opportunity cost of Marv making a wedding cake is __________ cheesecakes. (If your answer is a decimal, round to the nearest tenth)

Answer 1

Answer: 1.6 cheesecakes

Explanation: Opportunity cost is simply the cost of a forgone alternative. It is the cost of an opportunity forgone (and the loss of the benefits that could be received from that opportunity); the most valuable forgone alternative.

If Marv can decorate 8 wedding cakes or 13 cheesecakes, it follows that the opportunity cost of making 8 wedding cakes is 13 cheesecakes. The question asks the cost of making a cake. This is given by:

13/8 = 1.625 cheesecakes

= 1.6 cheesecakes to the nearest tenth as the answer.