Question

A textile firm can produce a limited number of shirts or pants with its available resources. The firm initially produced 500 pants and 700 shirts. If the firm decides to increase the number of shirts by 100 units, the opportunity cost will be ____ (100, 200, 400, 500) pants. If the firm is at point E and decides to increase the production of shirts by 500 units, the opportunity cost will be ____ (100, 200, 400, 500) pants.

Answer 1

Answer:

200 pants and 400 pants

Explanation:

In the given question, it is mentioned that the firm started producing 500 pants and 700 shirts

And if the firm decides to rises the number of shirts by 100 so, in this case,  the opportunity cost is 200 pants

Now if there is a rise in shirts production by 500 units so the opportunity cost is 400 pants

Therefore as per the situation, the first answer is 200 pants and the second answer is 400 pants