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Crazy boy [7]
3 years ago
7

Faruq spends all of his income on tacos and milkshakes. His income is $100, the price of tacos is $10, and the price of milkshak

es is $2. Put tacos on the horizontal axis and milkshakes on the vertical axis. If Faruq spends all of his income, the opportunity cost of one taco equals _____ milkshakes.
Business
1 answer:
jek_recluse [69]3 years ago
7 0

Answer:

The correct answer is 5.

Explanation:

Faruq's income is $100. The price of tacos is $10. The price of milkshakes is $2.

If Faruq spends all his income on tacos he will be able to purchase

=  \frac{100}{10}

=  10 tacos

If Faruq spends all his income on milkshakes he will be able to purchase

= \frac{100}{2}

= 50 milkshakes

So out of his total income he can either have 50 milkshakes or 10 tacos.

The opportunity cost of a taco will be

= \frac{whta\ is\ sacrificed}{what\ is\ gained}

= \frac{50}{10}

= 5

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