Question

A country has constant opportunity cost of production. If they devote all of their resources to the production of blankets they can produce a total of 810 per week. If they devote all of their resources to the production of t-shirts they can produce a total of 294 shirts per week. What is the opportunity cost of producing 1 t-shirt? Enter a number rounded to two decimal places, such as 32.47 or 4.30. Do not enter any other words or characters.

Answer 1

Answer: 2.75 blankets.

Explanation:

The opportunity cost is the value of a good that is sacrificed by choosing some other alternative. So, there are certain costs associated with the consumption of some goods.

In our case,

Opportunity cost of producing 1 shirt = $\frac{810}{294}$

                                                              = 2.75 blankets

Opportunity cost of producing 1 shirt is 2.75 blankets which means that 2.75 blankets have to be foregone to produce 1 shirt.