Question

If Farmer Sam MacDonald can produce 200 pounds of cabbages and 0 pounds of potatoes or 0 pounds of cabbages and 100 pounds of potatoes and faces a linear production possibility frontier for his farm, the opportunity cost of producing an additional pound of potatoes is ________ pound(s) of cabbage.Choose one answer.a. 1/2b. 2c. 100d. 200

Answer 1

Answer:

B) 2

Explanation:

Since Sam MacDonald's faces a linear production possibility frontier and can produce 200 pounds of cabbages or 100 pounds of potatoes, then he can produce 2 pounds of cabbage for every pound of potato produced (= 200 pounds / 100 pounds).  

For example, if he needed to produce 10 pounds of potatoes, then his opportunity cost would be 20 pounds of cabbages.